HARARE – Zimbabwe has applied for a court order to force an Impala Platinum Holdings Ltd. unit to sell almost 28 000 ha (69 000 acres) of its mining lease to the state, land the government says will benefit the economy.

The land, held under a lease by Zimplats Holdings Ltd. but owned by the state, hasn’t been developed as the company planned and as such is “excess” to requirements, the government argued in affidavits filed to the country’s administrative court.

“Compulsory acquisition of the land is necessary for economic growth,” Zimbabwean Mines Minister Walter Chidakwa said in the affidavit.

In 2009, Zimplats said it planned to spend $6.7-billion over the next 20 years to produce about one-million ounces of platinum a year, according to a document accompanying the government’s case. In 2015, Zimplats produced just 190 000 oz of the metal, which is mainly used to curb emissions from vehicles and as jewelry.

The government wants to use to the land to build a 600 MW power plant, which it says will earn the state $3-billion a year. There will also be “numerous” other benefits to the economy, it said. The economy has halved in size since 2000.
In Talks

Zimplats, which is 87% owned by Impala, has opposed the government’s request, saying the land isn’t surplus to requirements. The company handed over about a third of its mineral rights to the state a decade ago in exchange for cash and credits toward Zimbabwe’s indigenization rules, which require foreign-owned companies to be part owned by local black investors.

“We’ve been talking to the government about this issue for some time and those talks are continuing,” said Johan Theron, a spokesperson for Impala. “There’s a little piece of land between where we’re mining and what’s been released. They have an interest in acquiring more of that land.”

President Robert Mugabe’s administration has faced mounting public unrest as a cash shortage undermined the government’s ability to pay its workers and consumers’ access to funds to pay their bills. The country implemented a multicurrency system in 2009 after its economy collapsed in the wake of a campaign to seize white-owned commercial farms and hand them over to black subsistence farmers, slashing export income.

Zimplats lodged an objection to the proposed purchase as far back as March 2013.