Zimbabwe to Consider Waivers on Platinum, Diamonds Ownership Law

HARARE (Capital Markets in Africa ) -Zimbabwe will consider applications from companies mining platinum or diamonds to be exempted from a requirement that they be at least 51 percent owned by black citizens of the country.

The government wants companies to show they have a plan to achieve compliance before it will consider granting waivers, Mines Minister Winston Chitando said in an interview in Cape Town Wednesday.

“Companies should come up with proposals which suit their different circumstances,” the minister said. “We are not prescriptive” about who they should partner with.

Zimbabwe has abolished ownership requirements for all minerals other than platinum and diamonds and President Emmerson Mnangagwa said last month those requirements may also be lifted in the future. Zimbabwe has the world’s second-biggest platinum reserves and producers including the two largest,Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd. have slowed investment plans in the country because of the ownership law.

“The law provides for flexibility,” said Chitando, who was appointed minister after Mnangagwa replaced Robert Mugabe in December. He was previously chairman of Mimosa Mining Co., jointly owned by Impala and Sibanye Gold Ltd. However, each proposal “has to be something which is acceptable to government,” he said.

Platinum and diamonds are key exports for an economy that has halved in size since 2000 after a chaotic and violent land-reform program slashed shipments of tobacco, corn and roses. Zimbabwe also holds substantial deposits of gold, chrome, lithium, coal and iron ore.

Zimbabwe’s deposits of lithium, a key ingredient in rechargeable batteries used in electric vehicles, are a growing draw for potential investors, Chitando said.

The government has recently signed a deal with an international mining company to develop a $1.4 billion lithium deposit, the minister said, declining to identify the company because the transaction has not been made public. Details of the deal will be published in the next couple of days he said.

Source: Bloomberg Business News