New indigenisation framework ‘forces’ mining companies to spend 75pct revenue locally
Government is in the process of amending the indigenisation policy, which will see all mining companies compelled to spend 75 percent of their gross revenue locally, mines minister, Walter Chidakwa said on Thursday.
President Robert Mugabe called for 75 percent local spend for existing firms in a policy statement last April, in a rare admission that conflicting interpretations of the Indigenisation and Economic Empowerment Act — passed in 2008 to compel foreign companies, including mines and banks, to transfer at least 51 percent shares to black Zimbabweans — had caused confusion among current and existing investors.
The new requirement will only affect those miners that have not met the previous dispensation which required the resource companies to cede 51 percent of shareholding to locals, Chidakwa said.
Details of the amendment are yet to be presented to Cabinet, but further details will be announced at the Chamber of Mines annual general meeting due in May, he added.
“The clarification by his Excellency, the President (Mugabe) on the indigestion programme says for those companies which have not yet met the indigenisation requirements, conformity with the indigenisation requirement shall be by spending 75 percent of their gross revenue here in Zim. 75 percent, mark those words,” Chidakwa said at the launch of a $50 million loan facility for small scale miners at the Zimbabwe International Trade Fair on Thursday.
“So either you go for the 49:51 percent or the 75 percent spending. I can tell you many companies are keen on the 75 percent spending,” he said.
Analysts and critics of the policy have called for the outright repeal of the law, which they blame for Zimbabwe’s inability to attract foreign capital.
