Minimum requirements for mining sector’s indigenisation finalised

foreign-owned firms in the mining sector have been finalised.
The regulations are expected to be gazetted on Monday.
Government sources yesterday said in the regulations, Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere says the National Indigenisation and Economic Empowerment Fund could hold the majority stake. Other entities that could hold the quotas include the Zimbabwe Mining Development Corporation, its subsidiaries or a statutory or sovereign fund that maybe created.
“A controlling interest or the 51 per centum of the shares or interests which in terms of the Act is required to be held by indigenous Zimbabweans in the non-indigenous mining concerned.
“If the minimum indigenisation and empowerment quota is partly fulfilled by the non-indigenous mining business concerned at the date of this notice, the share of that quota that is remaining to be disposed of to indigenous Zimbabweans in order to be completely fulfilled.”
The regulations state that all mining companies that do not comply with the minimum indigenisation threshold would be required to submit indigenisation plans to the minister within 45 days.
Mining companies that do not comply with the indigenisation regulations have been given six months to regularise the ownership structure of their entities and can seek extension of the deadline from the minister.
“Every non-indigenous mining business shall achieve minimum indigenisation and empowerment quota by the disposal after approval of its indigenisation implementation plan by the minister of its shares or interests to designated entities no later than six months from the date of publication of this notice.
“The value of the shares or other interests required to be disposed of to a designated entity shall be calculated on a basis of valuation agreed to between the minister and the non-indigenous mining business concerned. This shall take into account the state’s sovereign ownership of the mineral exploited or proposed to be exploited by the non-indigenous mining business concern.”
The National indigenisation and Economic Empowerment Board recently threw out the sectoral committee on mining’s recommendation of 26 percent ownership by locals in mining ventures insisting on 51 percent. The board was against the committee’s recommendation for 26 percent direct equity holding and for the balance adding to 51 percent to be attained through empowerment credits for investment in community projects.
The policy would not however, affect mining firms that have already satisfied indigenisation requirements as stated in the Economic Empowerment (General) Regulations of 2010. Publication of the minimum requirements for indigenisation follows extensive consultations between the Government and the mining sector on the indigenisation programme.
Mining is fast turning into the country’s most strategic sector leveraging economic growth and development and already accounts for more than 60 percent of the total value of goods and services exported annually.
Government’s decision to have 100 percent interest in all new alluvial diamond projects follows the realisation that the mineral was a potential source of conflict and also did not require sophisticated equipment to exploit.