Miners Still concerned About the Indigenisation Policy

Miners Still concerned About the Indigenisation Policy
Mining Technology

A platinum miner said that Zimbabwe’s plan to compel mining companies to list majority shares on the Zimbabwe Stock Exchange, for the reserve sector in the indigenisation policy, is not feasible and would impede operators’ ability to grow and invest their assets according to Business Daily.

Impala Platinum Holdings Limited’s spokesman, Johan Theron said that investors can already trade Zimplats shares on the Australian Security Exchange

“A local primary listing would only be feasible with the requisite in-country capacity to raise the required capital and sustain daily trading volumes in the equity,” Johan Theron,said.

“We believe much work still needs to be done before the economy can structurally support this.”

Miners have always been raising concerned about the indigenisation policy which has been amended to scrape off the 51/49 threshold on sectors of the economy and minerals except for diamond and platinum.

Besides Theron’s concerns, RioZim Chairman Lovemore Chihota is on record saying that there is a need for clarity on the Indigenisation Act.  RioZim owns Murowa Diamonds, a diamond mine in the Zvishavane district.

“Without a firm direction on the indigenisation plan; financiers, lenders and equity holders alike, are highly unlikely to provide the much-needed funds,” Chihota said talking about the money that is needed to expand the operation of Murowa Diamonds by three years.

The Indigenisation policy, which came into effect during the Former President Robert Mugabe era has in the past been blamed for lack of Foreign Direct Investment (FDI) into Zimbabwe.

The government of Zimbabwe has been making some changes to the indigenisation law since its signing into law.

Industries were first targeted by the law with the then Indigenisation Minister Patrick Zhuwao arguing that banks were to also submit 51 percent of the profits they were making.

The policy was later on revised to mines with the Former President Mugabe clarifying that mining sector was the only one which was affected by the law.

When President Mnangagwa took over power, the policy was revised again to remove the 51/49 threshold on mines except for those mining diamond and platinum.

Lawmakers are still to debate the measure to compel diamond and platinum mining companies to list majority shares on ZSE.

“No mining right or title shall be granted or issued to a public company unless the majority of its shares are listed on a securities exchange in Zimbabwe,” the government is quoted by the Bloomberg.

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