NIEEF to top US$4bn

foreign-owned companies facilitates the expansion of businesses.

The signing of the landmark US$971 million empowerment deal between the Government and Impala Platinum Mines for the disposal of 51 percent stake in Zimplats by black indigenous Zimbabweans saw the value of the fund growing to US$1,56 billion.

Before the Zimplats deal — the biggest empowerment transactions ever signed in Zimbabwe — the fund had concluded multimillion-dollar deals which included Blanket Mine, Pretoria Portland Cement, Anglo Platinum’s Unki Mine and Mimosa.

NIEEB chairman Rtd Lieutenant-General Mike Nyambuya said he was optimistic that the fund’s value of assets would double to US$4 billion as companies were geared to expand businesses while focus would be on more acquisitions of stakes in other sectors.

In the next six months, the fund is expecting to get shares worth about US$500 million from Larfage, New Dawn, Murowa, Duration Gold, British America Tobacco and Old Mutual.

Analysts said now that major foreign-owned companies had come to terms with the reality of indigenisation, there was nothing to stop them from making further investments.

“Now that big firms have complied, there will be stability and we expect them to grow the businesses,” said one economic analyst.

“We are likely to see the value of the NIEEF more than doubling from the current US$1,56 billion to US$4 billion in the next three to five years. Big expansion projects and further accusations are on the way.”

PPC Zimbabwe intends to spend at least US$200 million in building a new cement processing plant in Mashonaland Central Province with an annual capacity of one million tonnes, managing director Mr Zak Limbada said in November last year.

“At the moment, we are busy drilling to identify the raw materials in Rushinga area and others in the northeastern parts of the country,” he said.

He spoke at the signing ceremony of a share subscription agreement with Umguza and Gwanda Share Community Ownership Trusts.

Anglo American Platinum, the world’s biggest platinum producer, said in November last year it was planning to open a new mine in Shurugwi.

Amplats subsidiary Unki Mines’ chief financial officer Mr Colin Chibafa said the new mine would cost US$400 million, with the potential of doubling output from Zimbabwe.

Unki said it was expecting to produce about 65 000 ounces of platinum last year.
Zimplats’s US$461 million Phase Two expansion would be completed in the next two years.

The company said the second phase of an expansion project expected to significantly boost Zimplats’ annual output to 270 000 ounces had been slowed down “as a result of the recently implemented capital preservation measures”, say media reports, citing as their source Implats chief executive Mr Terrence Goodlace.

Zimplats would also begin considering building a platinum refinery in the country once the combined production of platinum reaches 500 000 ounces a year.

Blanket Mine said it is planning a further US$37 million investment over the next four years. With the Government in the process of developing a new comprehensive Economic Empowerment Policy which will focus on creating new businesses largely owned by Zimbabweans, the fund would provide start-up capital for such projects.

Old Mutual said it would this year invest US$200 million in private equity. The company is targeting the mining, infrastructure and energy sectors.

Previously, there were misconceptions that the ongoing indigenisation programme was hindering the flow of foreign investments. But there are huge projects in the pipeline to be mostly undertaken by companies that have complied with the law.

“We believe that we have a clear policy and in instances where there has been ambiguity, we have always sought to clarify and explain it,” Youth Development, Indigenisation and Empowerment Minister Savior Kasukuwere has said.

“Our measure of investor confidence is thus demonstrated by successful partnerships we have sustained and will continue to grow with reputable international investors such as Implats, Aquarius Platinum, Anglo Platinum, Ecobank, Caledonia, PPC, BAT (British America Tobacco), Schweppes and Old Mutual.”