According to an extraordinary government gazette published last month, a controlling interest or 51% of any foreign-owned mining company with a net asset value of at least US$1 is required to be held by either the National Indigenisation and Economic Empowerment Board (NIEEB), or the Zimbabwe Mining Development Corporation (ZMDC); or any company or other entity incorporated by the ZMDC or NIEEB; or a statutory sovereign wealth fund that may be created by law.
It can also be transferred to an employee share ownership scheme or trust, management share ownership scheme or trust or community share ownership scheme or trust.
Information obtained on Friday shows that mines have pledged to support government’s indigenisation programme though some are prepared to give the shareholding in phases until it reaches the desired threshold.
Saviour Kasukuwere, Youth Development, Indigenisation and Empowerment minister told Standardbusiness on Friday the response by mining houses was encouraging and they were working on the issue of compliance with the regulations.
Kasukuwere said NIEEB would ensure that empowerment is broad based and that powerful people won’t take away everything.
NIEEB would then brief Kasukuwere, who would then take the matter to the country’s leadership.
Chamber of Mines president Victor Gapare in written responses to Standardbusiness said the mining body “believes a solution which satisfies the twin objectives of growing the mining industry and Zimbabwe’s economy and indigenisation and economic empowerment can be achieved”.
“The chamber and its members support the policy of indigenisation and economic empowerment provided it is done in a way which will meet the two objectives mentioned above,” Gapare said.
Mining is capital intensive and according to Gapare requires up to US$5 billion over the next five years and most of this money has to come from foreign direct investment.
“We need to ensure that the indigenisation imperative can co exist with the need to raise this kind of capital from investors,” he said.
Kasukuwere believes capital is not racist and locals can raise money to finance the projects.
Standardbusiness is reliably informed that of the 51% shareholding, more than half of it would be housed in a sovereign wealth fund to be used for future generations.
The remainder would be sold to locals and the money raised would be lent out to finance projects run by locals.
The plans, if approved, should be achieved within a period of 6 months, that is, issue of shares or interests to the designated entities.
The minister responsible for indigenisation may however grant a three months extension for compliance.
The mining industry is projected to grow by 33% this year buoyed by firming commodity prices on the world markets.