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PLANS by South Africa’s diversified mining group African Rainbow Minerals (ARM) to invest in Zimbabwe’s mining sector are facing resistance from shareholders worried about the new indigenisation law.
ARM chairman, Patrice Motsepe who is one of the wealthiest black businessmen in the neighbouring country has been championing the initiative to invest in Zimbabwe’s world class platinum group metals.
But Anglo-Rand Financial Services (ARFS), one of the investors in ARM is objecting to the proposed venture citing the new law that comes into effect tomorrow (Monday).
The law, which seeks to force foreign-owned firms to cede 51% of their shareholding to locals within the next five years, has caused consternation among investors.
Last week, Prime Minister Morgan Tsvangirai appeared to be losing his battle to have the regulations reversed after the Zanu PF politburo endorsed them.
ARFS portfolio manager, Louis Venter told Standardbusiness that none of his investors will take their money to Zimbabwe.
Venter had also challenged Motsepe, at the presentation of ARM’s company’s financial results early in the week after the chairman insisted on the Zimbabwe investment.
“I am not interested in investing in Zimbabwe at the moment until things normalise,” he said.
“Neither will I hazard sending my investors to Zimbabwe under the current circumstances.
“It is not proper to do so and it does not make business sense at all.”
Venter said there was no way an investor would pour money into a venture only to get minimum shareholding.
“We can come and invest in Zimbabwe on condition there is a free market.
“There is no way we can bring our money into a venture to aid the Zimbabwean government and at the end of the day get 49%,” Venter said from South Africa.
He said although there was a lot of interest in Zimbabwe by foreign investors, the new regulations would see most of them developing cold feet.
“We believe that investors should get value for their investment,” Venter added.
“In the case of Zimbabwe, getting the smaller shareholding is not what the investors want.
“And they will not come there until the Zimbabwean government puts its house in order.”
ARM was one of the first foreign companies that expressed interest in exploiting Zimbabwe’s vast mineral wealth following the formation of the inclusive government in February last year.
The unity government had brought with it a lot of promise that foreign investors would flock back into Zimbabwe but incessant squabbles over policy have severely dented the huge expectations.
BY NKULULEKO SIBANDA
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This guys says Zimbabwe should put its house in order, i know that statement means if anything is not in favour of a white person then its not in order.How many people have minotiy interest in organisations? They should bring a better argument than that. I know these guys in SA, they dont believe a black guy can do anything. But in Zim its different, in that case i support the bill.