CLAIM: Government has reversed its position to remove the 51% indigenisation requirement
SOURCE: Article by NewsDay
RATING: Incorrect
An article published by NewsDay on February 4, 2021, titled “Govt in indigenisation policy shift”, stated that: “President Emmerson Mnangagwa’s government has reverted to a policy that limits foreign investors to a maximum of 49% shareholding in diamond and platinum mines, arguing that recent moves towards expanding the scope of affected minerals had triggered confusion.”
This is incorrect.
The Government has, in fact, removed the requirement that mines should be 51%-owned by locals.
The NewsDay article is based on a statement, released by the Government on February 2, 2021, that sought to address uncertainty over an amendment carried in the Finance Act. The amendment, in Section 36, amended a provision in the Indigenisation and Economic Empowerment Act (IEE) that required that any operation in diamonds and platinum must be majority owned by locals.
However, the wording of that amendment, according to the Chamber of Mines, had left “room for the Minister responsible for indigenisation to prescribe minerals that shall be owned through appropriate designated entities.”
This was the anomaly that the Government’s February 2 statement set out to correct.
In its report, NewsDay omits a large section of the Government’s statement, an omission that has the effect of changing the meaning of that statement.
Below is NewsDay’s quote from the statement:
“Government announced the policy position to remove the requirement for 51% of the shareholding of businesses involved in the extraction of platinum and diamonds to be owned through a designated entity. That requirement has been removed through the amendment to the IEE Act, in section 3(1). To enhance certainty in relation to investments in the mining sector, and consistent with government policy, this insertion will be deleted.”
Below is the material section of the same statement, but now adding the section that NewsDay omits:
“Government announced the policy position to remove the requirement for 51% of the shareholding of businesses involved in the extraction of platinum and diamonds to be owned through a designated entity. There are no minerals the extraction of which require a business extracting same to have 51% of its shareholding owned by a designated entity. This is consistent with Government’s position that there is no mineral, the extraction of which Government considers requires mandatory shareholding participation through a designated entity. The provision in section 36 of the Finance Act (no 2) Act, 2020, to the effect that the Minister responsible for the IEE Act, may, in consultation with the Ministers responsible for Mines and Finance prescribe a mineral, the extraction of which would be subject to 51% shareholding by a designated entity, has been interpreted by some to represent a departure from Government’s stated position to open the mining sector to investment without the requirement for 51% of the shareholding being held by a designated entity. To enhance certainty in relation to investments in the mining sector, and consistent with government policy, this insertion will be deleted.”
Conclusion
NewsDay’s claim that Zimbabwe has reverted to 49% shareholding for foreign investors is not true. The amendment to the law in fact does the opposite; it removes local ownership requirements for diamonds and platinum, bringing them in line with other minerals, which were freed from local ownership requirements by earlier amendments in 2018.
Do you want to use our content? Click Here
