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Morgan Tsvangerai, Zimbabwe’s prime minister, said that the state did not now own 51 per cent of all mining companies that have not yet complied with the country’s empowerment law, contradicting a statement by Saviour Kasukuwere, the country’s indigenisation minister.
Responding to Mr Kasukuwere’s comments on Thursday, Mr Tsvangirai said that any attempt to implement the minister’s statement would be “unlawful” and “without the mandate of the state”.
The prime minister said the issue had not been discussed or agreed by the government. “The inclusive [coalition] government has not sanctioned the minister’s actions that are a threat to investment in the industry.”
In 2007, the Zimbabwe parliament approved a law requiring all foreign-owned companies and those owned by racial minorities in Zimbabwe to “indigenise” by offering 51 per cent of their shares to indigenous (black) Zimbabweans. In regulations published a year ago the indigenisation minister gave mining companies six months to comply, but very few have yet done so.
Last month, the country’s largest foreign investor, South African mining company Impala Platinum, said it had reached “agreement in principle” to sell 31 per cent of its shares to the Zimbabwe government, while setting aside 10 per cent of the share in its Zimbabwe subsidiary, Zimplats, for employees and a further 10 per cent for a community trust.
However, Impala made it clear that the agreement was contingent on the Zimbabwe government paying fair compensation for the 31 per cent shareholding estimated to be worth in excess of $500m.
Mr Kasukuwere has since ruled out any cash payment to foreign mining companies, saying Zimbabwe will treat the mineral deposits held by mining, but owned by the state, as its equity contribution. The indigenisation minister, a member of President Robert Mugabe’s Zanu-PF party, does not recognise the prime minister’s authority and takes his orders from the president. Indeed, this week Zanu-PF ministers boycotted a cabinet meeting chaired by Mr Tsvangirai, who is also leader of the rival Movement for Democratic Change, because Mr Mugabe, who normally chairs cabinet meetings, was out of the country.
Mr Tsvangirai complained that Mr Kasukuwere had not attended the meeting of ministers on Tuesday but had subsequently “surreptitiously published a notice with far-reaching economic consequences without consensus”.
The Indigenisation minister’s statement is seen as a mix of bluster and desperation. By demanding that Zimbabwe pay cash compensation for its shares in its 87 per cent-owned Zimbabwe subsidiary, Impala effectively called the minister’s bluff. Impala has the backing of the South African authorities who have said that they expect Zimbabwe to honour the terms of the bilateral investment protection agreement between the two countries. The Zimbabwe government does not have sufficient money to pay civil service salaries, let alone buy Impala’s shares.
Mining industry executives say they are unperturbed by the minister’s outburst, which they attribute to mounting frustration on his part over his inability to enforce his threats.