Zimplats is pushing for the amendment of a ground release agreement it signed with government and fiscal reforms to ensure the company’s profitability following its compliance with indigenisation requirements.
By Staff Writer
In a statement, Zimplats said following the indigenisation agreement, it was further agreed that by June 30 this year government would use its best endeavours in good faith to, among other things, amend the mining agreement and fiscal terms currently applicable to Zimplats such that additional profit tax and royalty rates are no worse than those granted or provided to any other platinum group of metals miner in Zimbabwe.
Last week Zimplats’ controlling shareholder, Implats, sold 51% of its stake as follows: National Indigenisation and Economic Empowerment Fund (31%), community share ownership trust (10%) and employees (10%), in the biggest empowerment transaction to date.
Zimplats also called on government to amend the 2012 mining regulations to reduce all ground rentals payable by the company to the same levels as were in force immediately prior to the promulgation and coming into force of the 2012 regulations.
However, recent reports say government plans to halve mining levies in 2013, after companies that included Zimplats’ parent company Impala complained that increases this year would hinder development. The platinum miner said the increase in fees would cost miners US$1 billion and bankrupt the country’s mining industry.
Zimplats has in the past clashed with the Zimbabwe Revenue Authority (Zimra) over tax payments. Last year, the miner was hit with a US$33,8 million revised assessment bill from the revenue collector, which they disputed.
The revised assessments disallowed, in the main, the claiming of capital expenditure in full in the year incurred as provided for in the written undertakings that were made by government in 2001.
Zimra has assessed Zimplats based on the 2001 undertakings, which were designed to put the company in the same position as other mining companies in Zimbabwe which are not subject to a special mining lease.
Under the indigenisation agreement, the new shareholders will assume the long outstanding debt of US$153 million from government, bringing the total transaction value of the 51% stake to US$971 million. Initial valuations by Brainworks Capital had put the value at US$818 million.
Zimplats released 36% of ground, including 99 million ounces of inferred resources. The market value of released claims was agreed at US$153 million, cash (taxes) credit of US$51 million and an empowerment credit of 19,5%.