Brendan Ryan Mon, 28 Mar 2011 17:36
[miningmx.com] -- SHARES in Impala Platinum (Implats) and Aquarius Platinum (Aquarius) fell sharply on Monday as investors took fright over the seriousness of the Zimbabwe government’s indigenisation demands.
Both groups have significant investments in Zimbabwe’s fledgling platinum sector, where Implats has just committed to spend $450m on the Phase 2 expansion of its Zimplats operations.
The two have been in discussions with the Zimbabwean authorities for the past two years over the proposed indigenisation requirements.
The belief until now was that a “reasonable” outcome was likely, which would reduce the official demand for a 51% controlling indigenous equity stake to the 26% level ruling in South Africa.
That may have changed on March 25, when a notice was gazetted stating every mining company had to “submit an indigenisation implementation plan complying with this notice within 45 days of the date of publication of this notice”.
The real kicker was in the final clause, which specified the way in which the value of the shares or other interests to be acquired by the indigenous partner would be calculated.
According to the notice, this valuation would take into account “the state’s sovereign ownership of the minerals or minerals exploited or proposed to be exploited by the non-indigenous mining business concerned”.
That raises the spectre of nationalisation of assets and the issue of compensation for companies already operating in the country and paying royalties to the government on ground to which they had been granted mining rights.
According to a platinum analyst: "You can interpret that clause any number of ways, but it’s serious. The platinum boys are engaging with the Zimbabwe government as a matter of urgency.”
Implats CEO David Brown told Miningmx: "From our point of view, we don’t see a material impact at this point in time and we remain in discussions and negotiations with the Zimbabwe government.
“Our understanding is that the 51% indigenisation requirement will be made up through a number of elements. These will include our investments in the country’s infrastructure and recognition of the mining ground that we gave back to the Zimbabwean government to secure title to the ground we now hold. “
A statement by Aquarius said that its Zimbabean subsidiary - Mimosa – “is engaged in discussions with the relevant authorities in order to establish a position that will be compliant with the act and beneficial to stakeholders”.
The writer owns shares in Implats and Aquarius.
[miningmx.com] -- SHARES in Impala Platinum (Implats) and Aquarius Platinum (Aquarius) fell sharply on Monday as investors took fright over the seriousness of the Zimbabwe government’s indigenisation demands.
Both groups have significant investments in Zimbabwe’s fledgling platinum sector, where Implats has just committed to spend $450m on the Phase 2 expansion of its Zimplats operations.
The two have been in discussions with the Zimbabwean authorities for the past two years over the proposed indigenisation requirements.
The belief until now was that a “reasonable” outcome was likely, which would reduce the official demand for a 51% controlling indigenous equity stake to the 26% level ruling in South Africa.
That may have changed on March 25, when a notice was gazetted stating every mining company had to “submit an indigenisation implementation plan complying with this notice within 45 days of the date of publication of this notice”.
The real kicker was in the final clause, which specified the way in which the value of the shares or other interests to be acquired by the indigenous partner would be calculated.
According to the notice, this valuation would take into account “the state’s sovereign ownership of the minerals or minerals exploited or proposed to be exploited by the non-indigenous mining business concerned”.
That raises the spectre of nationalisation of assets and the issue of compensation for companies already operating in the country and paying royalties to the government on ground to which they had been granted mining rights.
According to a platinum analyst: "You can interpret that clause any number of ways, but it’s serious. The platinum boys are engaging with the Zimbabwe government as a matter of urgency.”
Implats CEO David Brown told Miningmx: "From our point of view, we don’t see a material impact at this point in time and we remain in discussions and negotiations with the Zimbabwe government.
“Our understanding is that the 51% indigenisation requirement will be made up through a number of elements. These will include our investments in the country’s infrastructure and recognition of the mining ground that we gave back to the Zimbabwean government to secure title to the ground we now hold. “
A statement by Aquarius said that its Zimbabean subsidiary - Mimosa – “is engaged in discussions with the relevant authorities in order to establish a position that will be compliant with the act and beneficial to stakeholders”.
The writer owns shares in Implats and Aquarius.
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