Zimbabwe rejects 175 ownership proposals from foreign mining firms

Jul 20, 2011, 17:21 GMT

Harare - Zimbabwe on Wednesday rejected 175 proposals from foreign mining companies to transfer partial ownership of their companies to native Zimbabweans, the indigenization and economic empowerment minister said.

The companies have until September to resubmit their plans or risk losing all their holdings.

'We have received 175 proposals from mining companies and we've turned down all of them,' the minister, Saviour Kasukuwere, said at a conference.

'Just wait, by the end of September, any mining company that doesn't comply with the law, we'll kick them out. We'll ask them to hand over their assets to government,' he said.

President Robert Mugabe's Zanu-PF party, to which Kasukuwere belongs, says the policy is necessary to ensure that black Zimbabweans benefit from the country's lucrative mineral resources.

Prime Minister Morgan Tsvangirai, however, has said the policy drives out much needed foreign investors who could jump-start the ailing economy if they didn't feel their investments were at stake.

In June, Parliament declared that the indigenization regulations were 'unconstitutional, unreasonable and absurd,' and called for them to be repealed or revised.

But Kasukuwere said he would fight 'in courts any time of the day' to ensure that the policy was not repealed.

Zimbabwe's natural riches including diamonds, uranium, methane gas, chrome, platinum and gold.

Its empowerment drive is targeting major companies, including Anglo American, Rio Tinto and Implats. But it is not restricted to mining companies, as Nestle also appears to have been targeted.

Earlier this year Mugabe said he wanted the Swiss-owned Nestle indigenized because it had refused to buy milk from his farm.

Most companies have adopted a wait-and-see attitude, putting expansion and retooling plans on hold until there is clarity on how the empowerment plan will be executed. But that means much foreign investment is on hold.

According to the indigenization regulations, investors that fail to disclose how they plan to transfer shares within the stipulated period face prosecution.