HARARE (miningweekly.com) – Zimbabwean Youth Development, Indigenisation and Economic Empowerment Minister Saviour Kasukuwere says the government “will not pay anything” to the mining companies it intends to seize for failing to comply with the country's controversial indigenisation programme.

Addressing a feedback meeting on the progress of the indigenisation programme and community share schemes in the southern gold mining town of Gwanda on Friday, Kasukuwere said the government has contingency plans to seize all foreign-owned mining companies, which have not complied with the indigenisation policy.

"Because the mineral deposits in this country are 100% ours, the government will not pay anything to mining companies we take over under the indigenisation policy. These deposits are our natural heritage, yet these [foreign-owned] mining companies have been benefitting from them for years without developing the communities they operate in. The resource value of our minerals is greater than the investments they have made in extracting them," Kasukuwere said in his keynote address to the meeting.

He further emphasised the need for foreign-owned mining companies to comply with the indigenisation policy saying failure to do so would lead to those companies losing their businesses.

"We want to be very clear on this issue. The minerals belong to our people as a God-given gift. We give permission to investors who want to do mining here and those who do not want to comply with our laws can take their equipment and go. The government will not hesitate to declare a 100% takeover of those companies that are taking too long to comply."

For the first time since its controversial launch in May last year, Kasukuwere defined the political intentions behind the programme, saying it would be imprudent for foreign-owned miners to resist the indigenisation drive.

"Zanu PF has a policy of putting people first and that [indigenisation] is a major focus of all our programmes. This will no doubt make the party more acceptable to the people."

The statement seems to lend credence to opinions long held by economic commentators who view the indigenisation programme as a vote-catching tactic for Zanu PF ahead of the crucial elections set to mark the end of country's fragile coalition government.

Led by President Robert Mugabe, the party insists elections will be held later this year, with or without a new national Constitution, despite stiff opposition from Movement for Democratic Change factions and civil society groups.

In its ‘January 2012 Monthly Report for Zimbabwe’, the African Development Bank also warned that uncertainty around the implementation of the indigenisation programme in the mining industry would most likely impede the sector's capacity to lead the country's economic recovery throughout 2012.

In terms of the Indigenisation and Economic Empowerment Act, all foreign-owned companies with an asset value of $500 000 and above are required to surrender 51% of their shares to locals by May 2015. However, few companies have complied while many in the mining sector are still negotiating with the government after their share scheme proposals were rejected as inadequate.
 

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.