Chamber of Mines fighting a lost cause

lower the percentage to be ceded by foreign-owned companies from 51 percent of their equity stake to about half of this.
Firstly, the organisation tried to influence the National Indigenisation and Economic Empowerment Board Sectoral Committee on Mining to recommend that only 26 percent and not the regulated 51 percent of equity should be reserved for indigenous players in the sector.
This recommendation was, however, rejected by Government who, through the Ministry of Youth, Indigenisation and Economic Empowerment, went on to gazette the new requirements into law.
In terms of this gazette, the following was agreed upon: the percentage of indigenous shareholding should be: 100 percent for alluvial diamonds; 51 percent for other diamonds and minerals, and 51 percent for all new investments in the mining sector.
Share ownership trusts are entitled to 10 percent of profit before tax for reinvestment in the community.
Furthermore, two weeks ago mining companies affected by the legislation were given six months to regularise their share ownership to comply with the regulations.
Following the gazetting of Notice 114 of 2011 the Chamber of Mines again sprang into life and again sought to offer suggestions that are at variance with what was gazetted.
They again used the argument that the mining sector is a capital-intensive business and as such should not be tampered with.
While this is true and while democracy dictates that the Chamber of Mines should have its say on the matter, I beg to differ with them that are we so poor as indigenous Zimbabweans that we cannot take control of these mines.
Local fund managers and investment companies have been on an intense capital raising drive and indications are that there could be huge outlay of financial resources ready for investment on behalf of indigenous Zimbabweans.
I therefore challenge the mines to place their 51 percent shares on the market and see if local investors will not sweep them up in record time.
While the Chamber of Mines have also wanted corporate social responsibility programmes, skills development, release of claims, local procurement support for new businesses to be converted into credits for fulfilling empowerment requirements, I believe that their current efforts are still too small to be treated as such.
In my view these mining companies should not be content with doing small things in the community and then offer to have these treated as empowerment credits.
In my view companies such as Zimplats, for instance, should not just be content with building a school or clinic in, say, Ngezi.
While this may be beneficial to the Ngezi community, the biggest beneficiary is the company because these services are being put up in their area of operation, first for the benefit of their employees and dependants then the local communities. I believe that such a big company should at least invest in something big like a power-generating project that will benefit the nation at large.
I would not mind if they claim empowerment credits for such a project because it has a national perspective.
I also think the proposals by the Chamber are ill-timed especially as they are coming at a time when the indigenisation and empowerment drive has hit top gear and Zimbabweans are already psyched up for the programme.
Therefore, this last-minute attempt to delay the inevitable in my view is more likely to be futile and I think that the Chamber needs to get to grips with the reality on the ground and start implementing the indigenisation policy.
There are hundreds of Zimbabweans with viable business takeover plans supported by the required capital ready and impatiently waiting to acquire the 51 percent stakes in foreign-owned companies.
My advice to the Chamber is that it needs to engage those local individuals and companies that are active in the mining sector as a matter of urgency so that they can forge fruitful partnerships for the benefit of the affected businesses and the country. Local investors intending to enter the sector should approach the Ministry of Youth Development, Indigenisation and Empowerment to register their companies as required to comply with the law.
Finally, as the country celebrates its 31st independence today it becomes more relevant to highlight that political independence without economic independence means nothing so efforts should be stepped up to reconcile the two.
Taking the fight against economic sanctions imposed by the West to another level is also another imperative that should not be underestimated as we celebrate independence today.
In fact, Zimbabwe’s march into the next decade should be directed by the following equation: Indigenisation + Empowerment – Sanctions = Total Independence.
l The writer is CEO of ZvavaBudya Empowerment (Pvt) Ltd t/a ZV Empowerment He can be contacted on [email protected] or on 077 7 096 334.