March 28, 2011, 6:45 AM EDT
By Nelson Gore Banya and Brian Latham
March 28 - Zimbabwe’s government will make sure foreign companies are “junior partners” in the country, President Robert Mugabe said, after the state published regulations to take 51 percent of mines.
“We are taking back our country,” Mugabe said yesterday in the capital, Harare. “Listen, Britain and America, this is our country. If you have companies which would want to work in our mining sector, they are welcome to come and join us, but we must have our people as the major shareholders.”
Anglo American Plc and Rio Tinto Plc “must transform and become Zimbabwean,” the 87-year-old Mugabe said.
The government, in a March 25 decree, ordered foreign miners to explain within 45 days how they will cede 51 percent of their local assets to “indigenous” Zimbabweans. The companies have six months to sell the stake, according to the decree. The regulations are in line with the Indigenization and Economic Empowerment Act, first signed into law three years ago. The country has the world’s second-biggest platinum and chrome reserves after South Africa.
“It’s another dimension to the struggle,” Mugabe said. “Let that lesson go deep.” Investors should “come as friends, not as masters and superiors,” he said.
Aquarius Platinum Ltd., which owns a stake in a mine in the southern African nation, fell the most in eight months in London trading after it published a statement on the regulations. The Perth, Australia-based company said March 25 that its Mimosa Mining Co. unit is in discussions with the Zimbabwean authorities to find out how to comply with the law and is “confident it will be in a strong position to meet the requirements.”
No Commitment
Aquarius dropped as much as 7.5 percent to 342.4 pence, the biggest decline since July 19, and traded at 349.6 pence as of 11:35 a.m. in London. The shares dropped 6.1 percent in Johannesburg.
Calls by Bloomberg News to Rio Tinto’s Harare unit today to seek comment weren’t immediately answered. The company declined to comment when its London headquarters was called by phone March 25.
It’s unclear whether companies will get a market price, or any payment, for the shares they are forced to sell, Harare- based independent economist John Robertson said in an e-mailed statement today.
“Non-payment for what is being purchased would normally be considered very good cause for not parting with the asset, but it appears that government has no intention of offering the mining companies the right to cancel the sale of their shares on such grounds,” Robertson said.
“The much more serious longer-term effect of these regulations will be the almost complete arrest of new mining investment inflows,” he said.
Mugabe’s Zimbabwe African National Union-Patriotic Front is in a power-sharing government with the Movement for Democratic Change, led by Prime Minister Morgan Tsvangirai. The law doesn’t allow for expropriation or nationalization, Tsvangirai said on March 8. (By Bloomberg)
“We are taking back our country,” Mugabe said yesterday in the capital, Harare. “Listen, Britain and America, this is our country. If you have companies which would want to work in our mining sector, they are welcome to come and join us, but we must have our people as the major shareholders.”
Anglo American Plc and Rio Tinto Plc “must transform and become Zimbabwean,” the 87-year-old Mugabe said.
The government, in a March 25 decree, ordered foreign miners to explain within 45 days how they will cede 51 percent of their local assets to “indigenous” Zimbabweans. The companies have six months to sell the stake, according to the decree. The regulations are in line with the Indigenization and Economic Empowerment Act, first signed into law three years ago. The country has the world’s second-biggest platinum and chrome reserves after South Africa.
“It’s another dimension to the struggle,” Mugabe said. “Let that lesson go deep.” Investors should “come as friends, not as masters and superiors,” he said.
Aquarius Platinum Ltd., which owns a stake in a mine in the southern African nation, fell the most in eight months in London trading after it published a statement on the regulations. The Perth, Australia-based company said March 25 that its Mimosa Mining Co. unit is in discussions with the Zimbabwean authorities to find out how to comply with the law and is “confident it will be in a strong position to meet the requirements.”
No Commitment
Aquarius dropped as much as 7.5 percent to 342.4 pence, the biggest decline since July 19, and traded at 349.6 pence as of 11:35 a.m. in London. The shares dropped 6.1 percent in Johannesburg.
Calls by Bloomberg News to Rio Tinto’s Harare unit today to seek comment weren’t immediately answered. The company declined to comment when its London headquarters was called by phone March 25.
It’s unclear whether companies will get a market price, or any payment, for the shares they are forced to sell, Harare- based independent economist John Robertson said in an e-mailed statement today.
“Non-payment for what is being purchased would normally be considered very good cause for not parting with the asset, but it appears that government has no intention of offering the mining companies the right to cancel the sale of their shares on such grounds,” Robertson said.
“The much more serious longer-term effect of these regulations will be the almost complete arrest of new mining investment inflows,” he said.
Mugabe’s Zimbabwe African National Union-Patriotic Front is in a power-sharing government with the Movement for Democratic Change, led by Prime Minister Morgan Tsvangirai. The law doesn’t allow for expropriation or nationalization, Tsvangirai said on March 8. (By Bloomberg)
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