Miners Tumble as Harare Turns up Heat
Source: Reuters (3/28/11)
"Zimbabwe gave foreign miners six months to sell majority stakes to local black investors."
While something along the lines of the ultimatum had long been expected, the sharp declines underscored how jittery investors are about the political risks of doing business in the region.
The bourse's platinum mining index was down 3.43%.
Foreign mining firms in Zimbabwe must sell a majority stake to local black investors within six months, according to a release in the Government Gazette. It was released on Monday but dated from Friday.
It also said companies had 45 days in which to submit details of how they planned to transfer ownership.
Once it is published there it effectively becomes law.
The notice said that if a foreign—or "non-indigenous" mining company—showed "good cause", the deadline for the transfer of ownership could be extended for a "further period of not more than six months."
Investors are also concerned about regulatory uncertainty in South Africa, the world's largest platinum producer by far. The platinum price was about 0.8% lower on Monday.
Zimbabwean President Robert Mugabe on Sunday vowed his party would not back down from its drive to force foreign-owned companies to sell majorities to local blacks.
But Mugabe's ruling ZANU-PF party is in an uneasy unity government with the Movement for Democratic Change, which has called for more gradual policy changes on such fronts with the battered economy in the midst of a fragile recovery.
Zimbabwe's mining companies would be comfortable with selling stakes of 26% to local owners, the head of the country's mining chamber said earlier this month.