JOHANNESBURG (miningweekly.com) – Impala Platinum (Implats) CEO David Brown said on Thursday the company remained confident it would attain an “adequate and appropriate” level of equity ownership in Zimbabwe.

Zimbabwe’s new indigenisation law requires foreign companies to cede 51% of their equity to black Zimbabweans.

“If we were forced into a 51% equity level, it is quite clearly not a position that we would like. We will continue to negotiate with government, but would want to have control of entities, as we believe we can deliver best value for the country and the company by maintaining that control value,” he said at the company’s financial year results presentation, in Johannesburg.

A 51% equity level was “hugely problematic”, he said, noting that this would result in future growth opportunities in the industry becoming retarded.

Such opportunities included a possible third phase expansion and other potential developments at Zimplats, which Brown believed necessitated a stable investment climate. Zimplats’ expansion was progressing and would see the miner increase production by 90 000 oz to 270 000 oz of platinum in the 2014 financial year.

“Recent developments regarding indigenisation have made future investment decisions somewhat problematic,” he said, adding that the company had no objections to the principle of equity ownership as demonstrated by its relationship with the Royal Bafokeng Nation and employees in South Africa.

But, he was quick to note that ownership levels needed to adequately reflect the risks and rewards associated with mining.

The company’s proposal, which was submitted in May, but subsequently rejected by the Zimbabwean government,along with those of other companies, comprised an equity ownership plan of 25%, with a 19.5% credit against indigenisation and the balance made up of social infrastructure credits. “This sort of level would be agreeable but obviously we need to finalise some areas around that to get up to the 51% level.”

But, “an adequate and appropriate level of ownership will be the final result,” Brown confidently concluded.

Meanwhile, Implats group executive for marketing Derek Engelbrecht told Mining Weekly Online that nationalisation and indigenisation debates were good for industries but not for markets.

“Governments are there to govern and not to run businesses and that is the bottom line,” he stressed.

“We don’t think they run businesses well and it does not matter where it is, be it in Zimbabwe or South Africa - people get nervous.

“People read stories on these issues every day and would you be happy to use these metals if you thought they were being controlled by the government?” he commented.

Engelbrecht confidently indicated that this "nervousness" has not crept into the market or the company's operations.

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