American Renaissance

Blacks to Get 49% of Foreign-Owned Mines

Reuters, Zimbabwe Independent, Mar. 26

Zimbabwe has proposed a law requiring foreign mining companies to sell up to 49% of operations to local blacks, South Africa’s Implats said yesterday, but most of its mines would probably be exempt.

Government officials in Harare were not immediately available to comment, but Reuter was given a copy of a document entitled “Mines and Minerals Amendment Bill, 2004” in which the proposals are laid out.

“This draft was an internal paper prepared as a basis for discussion with the mining industry,” said Les Paton, executive director at Implats.

Impala Platinum Holdings Ltd (Implats), the world’s second biggest platinum producer, has an 82% stake in Zimbabwe Platinum Mines Ltd (Zimplats).

The draft says in order for private companies to hold a mining title, 49% of total shares must be held by “historically disadvantaged persons” within three years. The requirement is 25% for public firms.

“We agree with the principle of indigenisation … however what is of concern to us is the quantum, the 49%, and the timing,” Paton told Reuter.

Zimplats however holds a special mining lease which appears to exempt the company’s current operations and first phases of expansion from the requirements in the draft legislation, he added.

Implats has big plans to expand production in Zimbabwe but it was unclear whether future expansion might be exempt also.

Implats’ platinum output from Zimbabwe is due to total around 80 000 ounces this year, rising to 140 000 by 2006.

The Mimosa joint venture in which Implats and Australia’s Aquarius Platinum each own half would probably require 25% black ownership, Paton said.

A plan is underway to sell a 15% stake in Mimosa to a local black group. The mine is producing 65 000 ounces per year and an expansion could double the figure by 2007.

Paton said Implats had requested a meeting with the Mining minister but no date had been set.

Other mining firms that have operations in Zimbabwe include the world’s biggest platinum company, Anglo American Platinum, which is planning to develop the Unki project with production of 58 000 ounces of platinum per year.

Ghana’s Ashanti Goldfields, due to be acquired by AngloGold, owns the Freda-Rebecca gold mine in Zimbabwe which produced 98 255 ounces in 2002.

In South Africa, the government’s empowerment programme is pressuring firms to increase black participation in the mainstream economy that is still largely controlled by minority whites a decade after the fall of apartheid.

A leaked draft of a South African mining bill in 2002 that proposed firms sell half of local mines to blacks spurred a sell-off of South African mining shares.

The final mining legislation due to be passed in May demands that 15% of local mining operations be held by blacks within five years and 26% after 10 years.