Implats cedes 51% of Zimbabwe platinum business

January 11, 2013
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Shaft manager monitoring production at an Impala Platinum mine in South Africa/AFP
Shaft manager monitoring production at an Impala Platinum mine in South Africa/AFP
HARARE, Jan 11 – Impala Platinum, the world’s number two producer of platinum on Friday sealed a deal to sell a 51-percent stake in its Zimbabwean unit Zimplats under a state-imposed black empowerment scheme.

The deal will see Impala get $971 million (731 million euros) executive Terence Goodlace said, making it one of the largest empowerment transactions in Zimbabwe to date.

“We are pleased that after two years of hard work and diligence, we have produced an acceptable solution,” Goodlace said at a deal-signing ceremony in Harare.

“The uncertainty that had dogged Zimplats during the negotiations is now hopefully a thing of the past,” said Goodlace.

The agreement is in compliance with a controversial indigenisation law that President Robert Mugabe signed in 2010.

The law forces foreign-owned companies – including banks and retailers — to cede 51 percent ownership to black Zimbabwean investors.

Mugabe, who a decade ago launched a campaign to seize white-owned farmland, has threatened to take over firms which do not comply.

The plan is for the Australian-listed Zimplats to transfer 10 percent of shares to workers, 10 percent to a community trust where its mine is located and 31 percent to the government’s National Indigenisation and Economic Empowerment Fund.

Indigenisation Minister Saviour Kasukuwere said all foreign firms had no choice but to respect the equity laws.

“There will be no sacred cow spared and no stone unturned to ensure that the policy is fully implemented,” said Kasukuwere after inking signing the pact.

“Non-compliance will no longer be tolerated.”

He said the law sought to reverse colonial economic policies that pushed the majority blacks to the fringes of the mainstream economy.

The Zimplats deal will be closely watched as a bellwether of Zimbabwe’s investment climate and security of operations.

Mugabe’s partner in an shaky power sharing government, Prime Minister Morgan Tsvangirai, is uneasy with the law, which he says will drive away foreign investment just as the country is recovering from a decade-long economic collapse.

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