When hyperinflation is not enough just reach out and touch someone........known locally as "the golden touch"......to the tune of 25% of someone else's gold. My question would be, what are these miners still doing in Zimbabwe? I'd be thankful for my life and get the hell out of there, and just write it off as a loss.
New Law to Give Zimbabwe Free 25% Mine Stakes
By Business Day
20 Nov 2007 at 10:47 AM GMT-05:00
JOHANNESBURG (Business Day) -- Zimbabwe President Robert Mugabe yesterday made good on his promise to seize stakes in foreign mining companies, publishing a new law that will force miners to transfer a "free" 25% stake to the Zimbabwean government.
Analysts said the move was likely to worsen an economic crisis that has left Zimbabwe with the world's highest inflation rate at nearly 8,000% and discourage foreign investment.
The move will affect some of the world's biggest mining companies, including SA's Anglo Platinum [JSE:AMS] and Impala Platinum [JSE:IMP], and the UK's Rio Tinto [NYSE:RTP; LSE:RIO; ASX:RIO].
The Mines and Minerals Amendment Bill is expected to be presented to parliament and approved before the end of the year, and follows the passing in September of a general bill giving 51% stakes in foreign-owned firms to locals.
That bill did not provide for a 25% government shareholding, which will be included in the 51%.
Zimbabwe's mines, which produce gold, palladium, chrome, platinum and diamonds among other minerals, generate 42% of the country's foreign currency earnings, according to the central bank.
"It appears government wants a 25% freebie in the mines," Doug Verden, CEO of the country's Chamber of Mines, said yesterday. "It appears to be in precious metal mines and diamond mines, so it'll affect platinum and gold producers."
Existing laws meant to give local investors stakes in mining companies have not yielded results, as the local investors have failed to raise the required capital.
Verden described the draft law as unhelpful.
"If what we are seeing at first glance from the bill (becomes law), then this is not helpful," he said.
"However, we are still studying the bill and we will make an informed comment later this week." The chamber represents most mining companies in the country.
In September, parliament approved the Indigenisation and Empowerment Bill, which is intended to ensure that indigenous Zimbabweans own a 51% stake in foreign-owned firms.
"This section (of the Mines and Minerals Amendment Bill) sets out the objectives of the government to require every mining company ... to make 25% of its shares available for acquisition by the state or indigenous Zimbabweans," reads the draft law.
The world's second-biggest platinum producer, Implats, is the foreign mining firm with the most operations in Zimbabwe, while Rio Tinto has diamond interests and the world's top platinum producer, AngloPlat, is developing a mine in the country.
SA's Implats has said it already had agreements in place that it expected would meet the requirements of the general bill that seeks to grant majority ownership to locals, and that, in principle, it supported the aims of localisation.
"We have not seen the latest documentation, and will not be in a position to comment until we see it," said Implats CEO David Brown.
While Impala had already relinquished rights to "a big portion" of its mineral rights in Zimbabwe, it would need to do more to satisfy the Zimbabwean government's ownership requirements, said Stephen Roelofse, an analyst at Cape Town's Sanlam Investment Management.
Aquarius Platinum [LSE:AQP], which runs a platinum mine in Zimbabwe in a venture with Impala, was not immediately available for comment.
Greg Hunter, CEO of Central African Gold [LSE:CAN], which owns gold mines in Zimbabwe, said he could not immediately comment.
Angloplat's spokesman was not available for comment.
Zimbabwe Chamber of Mines president Jack Murewa said the industry would try to talk to the government about the proposed ownership changes, particularly the 25% shareholding the state sought.
"They seem to have disregarded our proposals on ownership," Murewa said.
"But our position remains the same - we're for a well-considered, phased approach - and we will continue talking to them."
The chamber's chief economist, David Matyanga, said last month the proposed localisation of mine ownership would scare away much-needed foreign investment and hit production in a sector that was the leading foreign currency earner.
Matyanga said Zimbabwe already had significant local involvement in the mining industry and risked losing further ground to other countries on the continent with friendlier investment policies. |
