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Implats says in the dark over land repossession
13/02/2013 00:00:00
by Business Day
 
Taking back idle mining land ... Obert Mpofu
 
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PLATINUM producer Implats said Wednesday that it had not been informed of the seizure of land from its Zimbabwe unit, Zimplats, by the government which was confirmed by Mines Minister Obert Mpofu.

Last month, Implats and Indigenisation Minister Saviour Kasukuwere signed a conditional, non-binding term sheet the transfer 20% of Zimplats to employee and community trusts and 31% to a state-run National Indigenisation and Economic Empowerment Fund. The conditions are to be finalised by June.

Zimplats holds a special mining lease over two areas in the country totalling 48,535ha in extent.

Mpofu said on Tuesday that the state had "repossessed" 27,948ha of land from Zimplats, which is listed in Australia and is 87% owned by Implats. Mr Mpofu said the land had been seized "with immediate effect " and offered to other investors.

"Zimbabwe has not realised significant value from the platinum sector beyond the traditional statutory payments. We can no longer continue having our minerals refined outside the country," he said.

"You can only compensate for land that has been bought. The ground belongs to Zimbabwe and there cannot be talks of compensation when the land belongs to you."

But Implats said it had not been notified of an intention to seize its land, nor told about it on Tuesday.
"We are unaware of it and we are trying to get clarification, but with no joy," Implats spokesman Bob Gilmour said.

Implats is releasing financial results on Thursday, which makes it difficult for its executives to fly to Harare for an audience with Mpofu.

Economist David Mupamhadzi, who is also a consultant to the ministry of economic planning, said on Tuesday that it was "critical for government officials to ensure that there is policy consistency and coherence in order to attract much-needed foreign direct investment".

It is not clear whether the land seized contains mineral resources or whether it formed part of Zimplats’ expansion plans. The company surrendered 51-million ounces of un-mined platinum to the government in 2006 to secure empowerment credits, but did not receive recognition for this.

The term sheet stipulates the government must pay $153m for those resources.

Mpofu on Tuesday also instructed platinum miners in Zimbabwe - which include Zimplats, Anglo American Platinum and Aquarius Platinum - to establish a platinum refinery in the country instead of sending the material to South Africa for processing.



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"The ministry has decided that beyond two years, it will stop processing exports for semi-processed platinum products. This is expected to give way for companies to begin channelling resources towards value addition through establishing a PGM (platinum group metals) refinery in the country," he said.

Implats CEO Terence Goodlace said last month that Zimplats would increase production from 180,000oz to 270,000oz of platinum by 2015.

The company would consider building a refinery in Zimbabwe after platinum production in the country topped 500,000oz a year, he said.

Zimplats has spent $30m on a feasibility study for a refinery in Zimbabwe. The plant would cost at least $2bn.

Structuring deals for a shared refinery is complicated, and Zimbabwe may not have sufficient electricity to support such a plant.

Mupamhadzi said it was wrong for the Zimbabwean government to interfere with the operations of platinum mining companies by ordering them to set up a refinery. The government should let the companies make their own decisions on the basis of economies of scale of operations, he said.

"The government must not interfere with operations of companies. The government should be there to provide regulatory environment, not to give instructions in terms of how companies should operate," he said.


 
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