Zimbabwe mines seek compromise

2010-05-19 15:23

Harare - Zimbabwe's Chamber of Mines on Wednesday proposed a compromise in the government's drive to force foreign firms to give a 51% stake to locals, saying 15% local shareholding for mines was enough.

Chamber president Victor Gapare said government should recognise that most mining companies built schools and roads in the areas where they operate, benefiting nearby communities.

"From a broad-based empowerment point of view, you have to look at things like schools, hospitals, roads and all the developments which takes place around mining communities, and in our minds that's true empowerment," Gapare told a news conference.

An indigenisation law that took effect on March 1 requires foreign firms valued at more than $500 000 to cede at least a 51% stake to locals.

Firms had been given 45 days to report their efforts at complying, but the deadline has been extended indefinitely.

The government says mines will be the law's first target, but Gapare said Harare should consider requiring only 15% local shareholding.

"The position which we put together says a minimum of 15% equity," Gapare said. "The rest to make up 51% will be in the form of social responsibility programmes" like building schools and hospitals.

"The mining companies are finding it very hard to attract capital. What we hope is that as the perceived country risk of Zimbabwe comes down, companies will be able to attract capital," he said.

In the first month after the law was published, Zimbabwe's stock market fell about 10%, while mining shares dropped 20%.



  • Realist - 2010-05-19 16:13

    Lets face it...WHO CARES..zimbabwe is finished and will never recover...its falling apart even more as people with money are haulling it out the useless place so fast in case these savages try and take that to for nothing...all the big companies must just extract themselves from the cess pit, demolish the place totally and let mugabe the destroyer in chief sink...where are the zimbabwe red shirts ways they are just too useless to do anything those people and love getting whipped by mugabe...stand up for yourselves you useless country and useless desreve failure cause you are failure.we all know the ANC is behind Mugabe as shown by malema but bugger the ANC they are nothing.

  • DeonL - 2010-05-19 16:30

    I Hope this is not what SA will look like in 10 years time? Maybee Julius will still be in the Youth League! or else who wil SAVE Us?

  • Mehluli - 2010-05-19 17:01

    Lets see how Europe have achived in empowering its citizens,compare it with African senarios and see how much emprovements we can do to the well being of poor majority people.If oil rich nations can control their nations then Africa can control its wealth and distribute it equaly to its citizen then Zimbabwe have got the right to claim 51% from mining companies in that country for the well being of its citizen.

  • TaxPayer - 2010-05-19 17:38

    Zimbabwe is such a sad hopeless lost case thanks to Mugabe, it doesnt even make headlines anymore when Mugabe opens his lunatic inspired mouth. Rest Assured the honourable Mr Malema is going to have the same fate. Mugabe and Melema should be left on a deserted island somewhere.

  • Go Boys Go! - 2010-05-19 17:48

    There should be no compromise. The Zim Government should forcefully claim their 51% in all mines and businesses as soon as possible. Mugabe has done a great job taking the farms. He must not rest until the job is done on the commercial side as well. I cannot wait to see what the country will look like then. And the nice thing is that all Zimbawians will have to live with the end result of their own madness. Go boys go!

  • Jim - 2010-05-20 08:18

    Mugabe should be in jail. Not calling the shots. He has murdered thousands of people and destroyed a good , wealthy country.

  • Silver Surfer - 2010-05-20 08:22

    @ Mehluli - I see you think just like your clever brothers North of us. You will ALWAYS be a prisoner.

  • Justice - 2010-05-20 09:03

    What Zimbabwe is experiencing is a necessary pain. No matter what happens going forward, the land will belong to its owners whom we hope one day will learn to work it productively for the benefit of all its citizens. The law of arbitrage says the productive vacuum in Zimbabwe will attract investors at some day and when that happens they will find Zimbabwe ready to offer them 49% and they will find it acceptable becasue that is what is on offer. It only feels painful now but in twenty or thirty years time it will be normal and acceptable and thats when Mugabe will be right. There are many schools of thought, those that say the route to empowerment is as important as the result and Mugabe who thinks that the result will justify the route!! But one thing for sure is the prevously advantaged cannot be the judge of the route one chooses!!!

  • Michael Chengetai - 2010-05-20 11:29

    I completely agree with justice in few year from now 49% equity for foreigners will be the nom. Lets look at what has been happening in agriculture ,when land reform was embarked on ouput decreased for obvious reason ,learning curve.From 2008 maize output increased to 1.5M tons ,though below prevoius levels of 2Million this was ann increase from 500 000 tons in 2007.This increase was due not to the so called commercial farmers but black farmers. This year we are projecting 1.6 million tons despite the severe drought again due to black farmers. Tobacco increased to 65 million Kgs in 2008 (at its peak was 120m kgs).This year 80 million tons are expected to be sold . This again a result of land reform. Were we had 2 000 selfish so called commercial farmers we now have over 100 000 indigesous farmers. It might take another 3 years to reach 120m kgs so what .The cake is being shared. Please note you White South African you should have been the first see that change in your country is imminent. I have visited your country on several times and for your UNCOMFORT a majority of blacks believe in what BOB has done inspite of the obvious discomfort it will cause in the initial stages. Its inevitable. Smell the coffee brethren! Change is coming in SA. Malema or no Malema. By the way I am preparing to Vote for BOB if elections are called any time. Regards but smell the coffee brethren. Beware the Ides of March( pronounced change)

  • rugga - 2010-05-20 12:03

    Guys i think your economics perspective is wanting. Production in any sector that has been nationalised in zim has been on a serious downward trend. I can gurantee that the little tobacco new farmers have been able to produce is because of the infrastructure already setup. Now these guys have no colleteral, the land they are working on is worthless because its nationalised and does not belong to them. Which sane bank is willing to lend such a farmer. Its rily sad

  • AJ - 2010-05-20 12:16

    Seems to be a lot of support for claiming someone else'e work without suitable compensation and not enough support for building something oneself. We must be in Africa!

  • zane@micheal - 2010-05-20 12:42

    zim is a failed state led by a ruthless dictator. if zim is so good why is half their people staying in sa they must go back to enjoy the 'wealth'

  • Mojo - 2010-05-20 13:20

    I was in Zim last week. Still an absolute mess and as for Michael saying 'smell the coffe you whites in SA' at least we can(at the moment) smell the coffee - you can't in Zim because the socalled war vets have taken over the coffee estates and production has stopped ! This is a country that used to be almost self sufficient and the Zim $ on a par with the US$. they even made motorcars in several factories once upon a time! Never mind the Nigerians every second Zimbabwean is now a scam artist. Finally the tobacco that he refers to is sun dried low value not the high value and prized flu tobacco that Zim was once renowned for. Yes, South Africa is heading the same way. Me I'm jumping the Zambesi and going further north where racism is not an issue like it is to all the comrades in this part of what once was a blessed continent.

  • Murungu - 2010-05-20 13:52

    @Michael and Justice Yes redistribution is in order by all means let us help the poor in Zimbabwe redistribution is called for and necesary. What is not necesary is a government that kills and tortures its citizens and under the ruse of helping the poor gives the people doing the torturing land and shares in companies how does that benefit anyone other than the torturers? The mines proposal is workable and helps provide the essential infrastructer Zimbabwe so direly needs so let us be more democratic and reach a compromise.

  • John - 2010-05-20 13:54

    Question If I would like to start a business in Zimbabwe will the goverment pay 51% of my start up costs? And should the business fail will the government be liable for 51% of the debt? After all we will be partners. How would one make business decisions would they need to speak to BOB everytime they need to spend money? I'm serious I would like to know how this will work. Tks

  • Richard - 2010-05-20 14:39

    @Michael - You have used agriculture as an argument in support of the '51/49' Zim/Foreign equity distribution. This is unfortunate for more reasons than can be stated here, but primarily because the 'agricultural land reform' was driven by issues other than 'justice for the disposessed'. Your great hero, Robert Mugabe, was looking for (1) handouts for political allies, (2) fast access to wealth to support a rapidly failing state, (3) cheap political kudos for the masses (throwing whites off farms, and giving them to blacks just sounds great, doesn't it), (4) a way of targeting the MDC in their areas of strong support, and (5) some way of satisfying his, his pals' and the people's desire for revenge against the so-called colonialists (read 'whites') - this was his idea of 'justice'. The result has been an unmitigated disaster, with deprivation, starvation, mass job-losses, and the creation of a huge expatriate community of Zimbabwean economic and political refugees. Further, you have (either deliberately, or through ignorance) stated a number of 'nonsense' facts. This is really shoddy of you. You will no doubt dispute this, so chew on the following few agricultural and economic facts amongst huge numbers of others: - There are an estimated 2 Million Zimbabweans now living in SA (the vast majority are economic refugees). They don't seem to be leaving to go back - I wonder why not? - There were some 4000 commercial farmers (not 2000, as you state). In tabacco there are now 150 left (of whom a further 50 were slated to lose their farms). - These 4000 farmers employed 400,000 workers (and thus supported a far greater number of dependents than the much larger farming community today). Compare this with your 100,000 'indigenous' farmers nowadays. - The military have headed up the Grain Marketing Board since 2008. - Many senior Grain Mkt Board Managers are military personnel. - Since 2008, as part of 'Operation Maguta', many black farms have been directly taken over by the military. - Further, starting in 2008, the military set up camps on many black farms to force the farmers to change to maize from other crops, irrespective of the farmers own preferred crops, and with no commitment to the price to be paid per production unit (ton). - In effect, the military (and ZANU-PF) control agriculture, and not 'the people' - so much for your vaunted land re-distribution! - Much of the targeted farm areas were in MDC strongholds, and are part of the intimidation programme against the said MDC. - At the start of the forced land distribution, some 2m tons of maize were produced. - The prediction (in Feb of this year - 2010) was for 500,000 tons (0.5m tons) - and not 1.6m tons as you state. The Zim Minister of Agriculture, Joseph Made, released this to the press at that time, and stated that a further 0.5m tons of imported maize would be needed to feed the people. - In that context, Zimbabwe has had to import maize since 2001, and this continues to be the case. These imports are primarily from the USA and the EU (your presumed 'enemies'). - At this time, some 68% of all Zimbabweans live below the poverty line. - Unemployment is running at 90% (2009/10), as opposed to 80% in 2006. - 237m Kgs of tabacco were produced in 2000 (not 120m Kgs, as you state). - This had dropped to 60m Kgs in 2004. - The prediction for 2010 (in Jan/Feb of this year) was for production of 65m Kgs of Golden Leaf (not 80m Tons - I assume you meant 80m Kgs), as you state. This is from the 150 remaining commercial tabacco farmers. I presume that the remaining 15m Kgs is being produced by some subset of the 100,000 'indigenous' farmers??? If so, then is is not a good showing at all, is it? - Tragically for Zimbabwean patriots, a vast amount of the tabacco-industry expertise has 'gone north' to Zambia and Malawi who have respectively tripled and doubled their own tabacco output since 2000 to 12m Kgs and 18m Kgs (again respectively). - A most significant issue (common to SA and to Zim) is that the system of agricultural extension officers has been destroyed. This has severely undermined the success of the new farmers, and is a result of placing no value on the lives of the people (farmers, farm-workers, extension officers, farm dependents) destroyed in this botched revolution. The overall result of this crime against the people of Zimbabwe has been a wrecked economy. 2006 growth was -4.6%; by 2008 this was -14.4%; In 2009, finally, there was a mild turnaround of 3.7% off a low base, and based mostly on the removal of the Zim dollar. One trusts this will have a more substantive basis going forward. So, if the same drivers are being applied to the 51/49 equity ratio law, and the same amount of 'thought and planning' is done, you will simply see an extension of the horrendous nightmare caused by your hero, Bob. The deletrious fallout in neighbouring nations will also continue. Insofar as SA is concerned, the criminal irresponsibility, incompetence and corruption of the 'Mugabe-method' cannot be afforded. Should it come about in the same way, both for land redistribution and business equity, the consequences for SA, and Southern Africa will be severe, and very likely terminal (with Zim, it has merely been like a bad bout of flu). I suggest that you get rid of your smug attitude and face up to the facts - your insinuations of imminent and (presumably) forcible change are peurile. One of these facts is that the commercial farmers of both countries are an enormous economic and social power for good, and have a vested interest in the future of their countries. Rather than the intellectually lazy (but oh-so 'lucrative for your cronies') 'grab-it' approach, a reasoned, inclusive, holistic and ecomically/socially responsible approach is needed. Otherwise, you and Justice and Mehluli, and millions of other SA and Zim citizens will ALL share in the pain that Justice refers to, and the pain will be life-threatening, will last for generations, and will likely finally consign Southern Africa to the back-benches of the world. By the way, the consequences of the 'Ides of March' were not at all good for the 'backstabber' - Julius Caesar may have died (I assume you equate him to the SA white Farmer / businessman) , but Brutus got his comeuppance as well. History now looks far more favourably on the former, whilst the latter is but a TRAITOROUS footnote. Have fun chappy!

  • pages:
  • 1