HARARE - Zimbabwe government is going ahead with plans to compulsorily acquire 28 000 hectares of mining land in Kadoma held by the country’s biggest platinum miner, Zimplats.
Through the second publication of a notice to the effect, President Robert Mugabe — ignoring various warnings from market experts that the move will put investment-starved Zimbabwe on a collision course with foreign investors — yesterday said the land was to be used “for the benefit of the public”.
This is despite the fact that Zimplats — majority-owned by South Africa-based Impala Platinum (Implats) —has filed opposing papers urging the courts to throw the case away on a technicality.
Initially released on December 11, 2016, the notice indicated Mugabe’s intention to forcibly acquire the mining land calling on any objecting parties to lodge complains 30 days from the notice’s first publication date.
In addition, Mugabe also urged Zimplats to apply for compensation of the land to be acquired by government.
“Notice is hereby given, in terms of section 398 (1) of the Mines and Minerals Act (Chapter 21:05), that the President intends to acquire compulsorily part of the mining location held by Zimbabwe Platinum Mines…under special mining lease number 1 of 1994 as it fully appears below, for the utilisation of such mining location for the benefit of the public,” Mugabe said.
However, in its submission opposing the land grab, Zimplats contends that, under the 2006 release of ground agreement, “it was accepted by both the government and Zimplats that the ground that Zimplats remained with was required by Zimplats to achieve its expansion objectives.”
The agreement also stipulated that the Zimbabwe government would pay $153 million for those resources. It is yet to do so.
Government has completely ignored this, threatening the Australia Stock Exchange-listed company about the impending expiry of the miner’s 25-year special mining lease granted to its successor BHP Minerals Zimbabwe in 1994.
The 28 000 hectares, which is held by Zimplats under a special mining lease, has been lying idle for years and government intends to acquire and re-allocate it to prospective miners who are keen on extracting platinum for the country’s economic growth.
Market watchers say it is this treatment of a firm that has spent nearly $4,6 billion — $533 million of this in taxes and royalties — in the country since 2002 that will spook many investors.
Analysts have cited Zimbabwe’s uncertain investment environment, plagued by policy inconsistency, disregard for agreements, a controversial local ownership law and the oft-violent seizure of white-owned farms since 2000, as the reason why the country continues to lag behind its regional peers in terms of drawing Foreign Direct Investment (FDI).
In 2015, FDI declined 23 percent to $421 million at a time when Mozambique and Zambia registered $3,7 billion and $1,6 billion, respectively.
A notice to acquire the land was published in the Government Gazette of April 26, 2013 and Zimplats was served with the notice. The mining company objected to the compulsory acquisition on May 7 the same year, in terms of the Land Acquisition Act.
Mugabe is reported to have resorted to the courts after the Mines minister engaged Zimplats for a roundtable meeting but failed to reach an agreement.
Zimplats holds a special mining lease over two areas in the country totalling 48 535 hectares in extent. Back in 2013, both Implats and Zimplats said they were taking legal advice to protect their rights.