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mining giant.
Through its South African parent firm, Implats, Zimplats agreed to shed 10 percent to local communities, 10 percent to workers and 31 percent to the National Indigenisation and Economic Empowerment Fund.
This came out of long deliberations between Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere, Implats chairman Dr Khotso Mokhele and chief executive Mr David Brown.
The multimillion-dollar transaction ranks as the biggest empowerment deal in the history of Zimbabwe considering its potential effect on workers, the Mhondoro-Ngezi, Chegutu and Zvimba local communities.
The Australian Stock Exchange-listed firm has a total of 108 million shares in issue, which gives Zimbabwe’s biggest miner a value of US$1,12 billion.
At current values of 10,8 Australian cents, local communities and workers now own US$232 million of the company for their 20 percent equity.
The combined equity for these previously poor and marginalised constituencies makes them several hundred times wealthier than a significant number of companies listed on the Zimbabwe Stock Exchange.
Each dividend declared will have significant impact on the welfare of the workers and the local communities considering the platinum firm’s profitability.
Local communities will not be called to make capital contributions to future expansions, but all other shareholders will have to contribute pro-rata in line with their shareholding and finer details on the issue are not yet in place. Implats said the final agreed position on the share transfer will determine the future expansion of the firm, which the South African firm said would not be possible without each shareholder chipping in with resources.
Zimplats was one of three firms that remained open even at the height of Zimbabwe’s economic crisis in 2008 demonstrating its resilience.
Barring unforeseen constraints, the Zimplats deal has set the tone for similar empowerment deals and other mining houses will take a leaf from this example that could change the livelihoods of thousands of families.
The reasoning behind broad-based empowerment, especially through mineral resources, is the fact that local communities usually remain ghost, degraded and unsightly settlements of little value when minerals mine out. But the current approach should enable them to develop other facilities that will sustain livelihoods for decades to come even when resources are exhausted considering minerals are a finite resource that depletes at some point.
The Zimplats deal will serve as a reference case relative to indigenisation of the economy and the Government’s position regarding the unacceptability of empowerment credits in meeting indigenisation thresholds.
The world over, resources are a contentious issue and at one point or the other locals will always demand a fair share of their natural endowments.
Minister Kasukuwere said while Government appreciated Implats’ contribution to the growth of the local economy, there was need to ensure mutual benefit.
Mr Brown rightly admitted that the agreement with the Government would create a stable operating environment and brings certainty to Zimbabwe.
“By meeting the principle of indigenisation rule of the country, it creates some certainty, obviously there are some details of value transfers to be worked through.
“But this creates a more stable investment environment at least one will play to terms of the rules, which rules we need to play to,” said Mr Brown.
Online Reporter