We won't pay indigenisation advisory bill: Zimplats insists

HARARE - Australian Stock Exchange-listed Zimbabwe Platinum Mines Limited (Zimplats) insists it will not pay the $17 million invoice levied by Brainworks Capital (Brainworks).

This comes as the platinum group metals producer in February rejected Brainworks’ bill for financial advisory services offered in the crafting of the miner’s $971 million indigenisation deal.

“Zimplats has no obligation to pay Brainworks,” the group’s corporate affairs head Busi Chindove told businessdaily.

“… there have not been any new developments beyond the position as communicated in the past,” she said.

Zimplats argues it did not enlist Brainworks, and the consultancy firm’s invoice should be settled by the National Indigenisation and Economic Empowerment Board (Nieeb) — a government body created to implement the empowerment programme — which contracted it.

In a February 22 letter, Zimplats chief executive Alex Mhembere said it was extremely absurd for the company and its South African shareholders, Impala Platinum Holdings Limited (Implats), to foot the Brainworks bill when it had been contracted by government.

This was after Nieeb chief executive Wilson Gwatiringa had written to Zimplats seeking payment for advisory fees for the Zimplats indigenisation deal.

In its response, the company said the demand was akin to a technical payment of dividends “to one shareholder without extending the same to other shareholders”.

“In this instance it only leaves Implats, the counterparts in the negotiations, to possibly settle the bill,” Mhembere said.

“We accordingly forwarded the invoice for their attention but regrettably they advised that they are not in a position to honour the payment on the basis that Brainworks Capital was engaged by Nieeb and was acting for and advising Nieeb/the government in the negotiations between Nieeb/the government and Implats in relation to the Zimplats IIP,” he added.

Zimplats complied with Zimbabwe’s indigenisation law in January this year after its major shareholder Implats — the world’s second-largest platinum producer after Anglo American — ceded a 51 percent stake to locals.

Under the indigenisation deal, 31 percent was issued to Nieeb, 10 percent to employees and the other 10 percent was given to Ngezi-Zvimba Community Share Ownership Trust.

Meanwhile, Chindove could not disclose detail on how much Zimplats had invested on its land that was compulsory acquired by government.

“The matter is still under discussion and a statement will be issued at the appropriate time,” she said, adding that “it is in the public domain that the company has lodged its objection.”

In February, government repossessed nearly 28 000 hectares of Zimplats’ platinum claims in a move Mines minister Obert Mpofu said was meant to maximise benefits from the country’s resources.

“The ministry is following on the creation of real opportunity and investments space by making more land available for new investments, attracting new players into the industry and acting on excess and unutilised ground,” Mpofu said.

“This will be made possible through reviewing of all mining rights deemed to be in excess. To that end, following protracted discussions on the release of excess ground, my ministry is taking a step forward to repossess excess ground from Zimplats measuring 27 948 hactares,” he said.

Mpofu said the mining giant was granted claims that quadruple the contract stretching beyond a hundred years.

“Zimplats was granted special lease in 1994 covering 25 years, but geological information now indicate that the total ground granted and the mineral endowment therein has a lifespan far exceeding the prescribed period,” he said.

Reports say it will take Zimplats approximately four centuries to exhaust its platinum reserves. - Eric Chiriga, Business Editor

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