New Zimplats equity plan approved

Harare - Zimbabwe and Zimplats, the local unit of the world's second-largest platinum producer Impala Platinum Holdings [JSE:IMP], said on Tuesday they had agreed to produce a revised plan for a law requiring mining firms to turn over a 51% stake to local blacks.

Zimbabwe rejected Zimplats' initial share transfer plan. As a result, the empowerment minister asked the mining ministry to cancel the unit's operating licence, Zimplats said last week.

"The parties met on September 12 and agreed on a process that will result in the production of a revised indigenisation implementation plan for Zimplats in line with, and reflective of, the country's indigenisation legislation," the company and Empowerment Minister Saviour Kasukuwere said in a joint statement.

The revised plan will be submitted to the government by November 15 and implemented immediately thereafter, the statement said.

"In the meantime, Zimplats and the ministry will immediately proceed to implement a community share ownership trust," the statement said.

Analysts see the Zimbabwe law as a way to squeeze more funds out of companies trying to build operations in the country with the world's second-biggest platinum reserves after South Africa.

There likely is not enough money in the impoverished state to buy controlling stakes in foreign mining firms.

Zimbabwe has neither money nor expertise to run mines, where production will almost certainly dwindle under forced local ownership.

Implats CEO David Brown said despite Zimbabwe's equity policy, the company was keen to proceed with a planned $460m expansion project there which would bring its total investment to close to $1bn - the single largest investment in the politically troubled nation.

"We're still moving ahead with the phase 2 of the plan. Obviously we will be consulting with the authorities on that," he told Reuters on the sidelines of a news conference.

The expansion is meant to lift Zimplats' annual output of refined platinum by 90 000 ounces to 270 000 oz. The Zimbabwe unit contributes about 10% of Implats' output.

"Zimplats is a very important asset for us; we will do all we can to support their activities," Kasukuwere told Reuters.

Implats shares were down 4.48% at R154.81 by 08:36 GMT, compared with a 1.27% drop in the JSE Top 40 - (Tradeable) [JSE:J200] blue chip index.