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Zimbabwe firm takeovers to start with mines: minister
Reuters
April 20, 2010

http://www.reuters.com/article/idUSWEB086420100420?type=hotStocksNews

Zimbabwe's controversial policy of transferring majority control of foreign-owned firms to black Zimbabweans will begin in the key mining sector, a minister said on Tuesday.

Under the regulations, which took effect on March 1, foreign-owned companies must submit plans to show how they will sell 51 percent of their shares to black Zimbabweans within five years.

"I am happy to announce that government has unanimously decided that implementation of our indigenisation policy starts with the mining sector,"

Youth, Indigenisation and Empowerment Minister Saviour Kasukuwere told reporters after a cabinet meeting in Harare.

The world's two largest platinum miners, Anglo Platinum and Impala Platinum, have multi-million dollar investments in Zimbabwe, while Rio Tinto has gold and diamond interests.

Kasukuwere said government had noted investor fears that foreign firms would be forced to give up shares without payment.

"Some of the concerns raised relate to the intepretation of the word 'cede' in relation to shareholding, which was misconstrued to suggest compulsory takeover without compensation," he said.

"The indigenisation programme is based on fair transaction where full value is compensated for."

Kasukuwere said hundreds of foreign firms in Zimbabwe had submitted plans to sell majority stakes to local blacks, despite confusion over an affirmative action law that has divided the unity government.

Kasukuwere, an ally of President Robert Mugabe, last month ordered firms to report details of ownership and plans to achieve majority local control.

Government divided

The power-sharing government formed by Mugabe and Prime Minister Morgan Tsvangirai last year is divided over the regulations, which Tsvangirai has said were issued without consulting the cabinet. A spokesman for Tsvangirai said last week the regulations had been suspended, a statement quickly denied by both Mugabe and Kasukuwere.

Kasukuwere told the state-controlled Herald newspaper earlier on Tuesday that foreign firms were complying.

"We have so far received more than 400 submissions from various companies and as government we are happy with such an overwhelming response," he said the newspaper.

Units of British American Tobacco Plc and Impala Platinum are among the companies that have submitted plans, the newspaper said.

Firms that have not yet submitted plans will get a 30-day extension from the April 15 deadline, Kasukuwere told the newspaper, adding the government could terminate licences of companies that did not comply.

Mugabe's ZANU-PF government passed an indigenisation and economic empowerment law in 2007, before the formation of the unity government.

Analysts have said the policy would discourage foreign investment and hurt efforts to fix a crippled economy.

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