Caledonia, which owns Blanket Mine south of Zimbabwe, insisted that government’s rejection of proposals as suggested by the company and other firms in the sector would scare off existing and potential investors in an industry that is in need of financial injection to retain its status as a major earner of foreign currency.
Last week, it was reported the Zimbabwean government rejected all the empowerment proposals put forward by foreign-owned mining companies in Zimbabwe, threatening to “kick them out” if the did not revise the plans.
Caledonia warned against an improperly-conducted indigenization plan.
“Indigenization legislation is once again high on the Government’s political agenda making Zimbabwe an exceptionally difficult investment environment. Uncertainty regarding Blanket’s obligations in respect of the implementation of Indigenization and the general climate of uncertainty that indigenization policies have created in Zimbabwe creates multiple risks which include: investor uncertainty, uncertainty as to the level of any indigenization shareholding, the identity of indigenization partners and uncertainty as to any future revenue obligations that may be required to offset a requirement for direct equity participation by indigenous parties,” the company said in reference to inquiries from The Zimbabwean.
President Mugabe brought the Indigenization and Economic Empowerment Act into law through decree in March 2008. The law seeks to ensure that at least 51 percent of all businesses in Zimbabwe are held by indigenous Zimbabweans.
Caledonia has previously warned against partisan indigenization policies. Speculation is rife the programme, such as the chaotic so-called land redistribution exercise, would benefit the political elite.
Post published in: Business