New amendment gives the Zimbabwean government power to take over control of mines
Miners are hoping its just a poorly worded amendment
Expropriation of export earnings are also a major worry
Zimbabwean miners are fretting over amendments to ownership laws that seem to be reintroducing the country’s controversial indigenisation laws on the mining sector.
The southern African country scrapped its controversial empowerment laws in 2018 and allowed foreigners to hold up to 100% ownership including in the mining sector.
Only platinum and diamond mining remained a preserve for locals with foreign ownership only allowed for a 41% stake. Promises were, however, made that the two sectors would also be opened for increased foreign ownership.
However, amendments brought through the Finance Act 2021 seem to have reintroduced indigenisation to the entire mining sector.
Section 3 (1) following the amendments in the Finance Act 2021 now reads:
"The State shall, by this Act, or through regulations under this Act or any other law secure that at least fifty-one per centum of the shares or other ownership interest of every designated extractive business, that is to say a company, entity or business involved in the extraction of such mineral as may be prescribed by the Minister in consultation with the Minister responsible for Mines and the Minister responsible for Finance shall be owned through an appropriate designated entity (with or without the participation of a community share ownership scheme or employee share ownership scheme or trust, or both)"
A potential threat
In a statement to its members, the Chamber of Mines of Zimbabwe (Mines Chamber), which represents mining houses in the country, said the resultant wording of the amendments as introduced leave room for government to prescribe minerals that shall be owned through appropriate designated entities.The amendments, the Mines Chamber said, means the Indigenisation and Economic Empowerment Act is still a factor in play to be considered when assessing investments into Zimbabwe.It said while on the surface it appears that no mineral is mentioned for compliance with the equity provision, all minerals are at risk of being prescribed for compliance."This appears to be a reversal of the policy position where the equity provision was removed in favour of empowerment requirements," the Mines Chamber said.A law firm, Manokore Attorneys, shared the same view and said section 36 opens the way for the wholesale indigenisation of the mining sector.Veritas Zimbabwe, a group of lawyers that provide […]
