By Alex Bell
11 January 2013
International mining giant Impala Platinum on Friday finalised a deal with Zimbabwe to ‘sell’ a controlling stake of its local unit, in a multi million dollar deal that has raised eyebrows.
Implats, which owns the Zimplats mining firm in Zimbabwe and is the country’s largest single foreign investor, last year conceded to the ZANU PF led indigenisation campaign and agreed to a 51% share handover.
The deal finalised Friday will see Implats ‘sell’ its shares for US$971 million to Zimbabwe, with 10% of the shares going to a Community Trust, 10% to an ‘employee share ownership trust’, and 31% to the State’s National Indigenisation and Economic Empowerment Fund. The fund, which officials say now has US$2 billion of assets, is headed by a former army general and administered by Indigenisation Minister Saviour Kasukuwere.
The Implats agreement followed months of sparring with Kasukuwere, who repeatedly threatened the platinum miners with unspecified action, unless they complied with the Indigenisation Act. Some observers have since criticised Implats for giving in to what has been described as ‘bullying tactics’, while others have argued that the mining group had little choice but to give in, or lose its lucrative footing in Zimbabwe.
Whatever Implats’ reasoning, the group insists it is in a ‘win-win’ situation, despite needing to pay a ‘loan’ for its new majority shareholders to buy the shares. Zimplats will reportedly provide the loan at an annual interest rate of 10 percent and the debt is to be repaid through dividends over 10 years. Zimplats management meanwhile will stay on at the group.
Economic analyst Masimba Kuchera told SW Radio Africa on Friday that the Zimplats deal was not surprising because of the pressure it was under. He said that, while Implats is “making the right noises” by ‘welcoming’ the deal, it only happened while the group was “weakened.”
“I think that Implats has publicly supported the indigenisation programme, hoping it will mean security for them in the future. But the problem with these deals is there are issues on how the resources are managed and used,” Kuchera said.
He explained that there needs to be more commitment and explanation about how the indigenisation plans are going to benefit all ordinary Zimbabweans.
“Certainly ordinary people in the areas where companies are ceding 51% will benefit. But I think it needs to be broader than that and should include more people. And discussions should continue about how this will benefit more people than it is right now,” Kuchera said.
Last month, Implats and the Aquarius group signed another deal with Zimbabwe to sell 51% of shares in their joint venture, Mimosa. Anglo American Platinum, the world’s largest platinum producer, has also agreed to transfer a majority stake in its Unki mine to locals in a $142.8 million deal made last November.