JOHANNESBURG (miningweekly.com) – Anglo American Platinum (Amplats) said on Wednesday that it would meet officials from the Zimbabwe government later this week to discuss the indigenisation plan for its Unki mine.
The world’s largest platinum producer, led by CEO Neville Nicolau, submitted its indigenisation plan for its first Zimbabwe-based platinum operation earlier this week.
Spokesperson Mpumi Sithole said Amplats was unable to divulge any details about the plan or the group’s expectations until the meetings were concluded.
She added, however, that it expected a decision by next week.
The Unki mine, near Gweru, is currently ramping up production and will reach full production of 120 000 t/m in 2013.
Zimbabwe’s indigenisation laws require foreign firms to transfer 51% of their assets in the country to locals. Treaty protection under the South Africa-Zimbabwe bilateral agreement, however, committed the Zimbabwe government to the payment of fair compensation for shares in an operation and covered the exploration of alternative processes should compensation be deemed unfair.
Last month, the Zimbabwe government accepted the indigenisation plan of world number-two platinum miner Impala Platinum’s (Implats’) Zimplats operation.
Implats reached an in-principle agreement that allowed for 10% of the operation to be allocated to the near-mine community trust, funded through an interest-free loan. Another 10%, allocated to Zimplats employees, would be funded by an interest-bearing loan. Zimplats would sell a 31% fully contributory stake in Zimplats to the National Indigenisation Economic and Empowerment Board for cash - an independently determined fair value was still to be agreed.
Cadiz mining analyst Peter Major said that the agreement between the Zimbabwe government and Implats was a significant milestone, however, he questioned whether it was a sustainable “once empowered, always empowered” deal.
The arrangement relied on the country’s ability to honour its commitment of paying fair compensation, as well as handling the responsibilities of such a large ownership.
Major said that he was not certain that Zimbabwe could, in the future, manage its portion of the capital required to grow and expand a mining project, which could result in a share dilution for the country.