Nippon Steel, Sojitz to take 49% stake in Champion Iron’s project in Canada
The Kami project will also receive up to A$490 million in contributions from Nippon and Sojitz.
Zimbabwe’s Black Empowerment Minister, Saviour Kasukuwere, announced today it has taken majority ownership of foreign-owned mining firms, which had not already given a controlling stake to black Zimbabweans.
“All mining companies that have not complied … should note that 51% of their shareholding is now deemed to be owned by the state,” empowerment minister Kasukuwere said in a statement.
Kasukuwere said profits since Sept. 25 from the government’s new controlling shareholdings were also regarded as “property of the state.” But he said companies that made a loss since then would have to cover losses from their side, and not draw from the “indigenized portion” held by the state to pay debt.
Johannesburg-listed Impala Platinum, the world’s second-biggest platinum producer, bowed to pressure last month to surrender half its Zimplats unit.
The deal, the first large agreement reached between a mining company and Zimbabwe’s government after it introduced an indigenization law in early 2010, generated passionate arguments.
The Herald newspaper, a state-controlled media outlet used to broadcast government announcements, called Impala “naive and irresponsible” to assume it could expand its operations in the nation based on what Zimbabwe said was a “flawed” agreement.
In 2010 President Robert Mugabe (photo) created the so-called “indigenisation” law, which calls on international mining companies to transfer 51% stakes to local investors or risk losing permits by September last year.
Firms that did not meet the deadline are now under state control.
5 Comments
Gwmoffat
Zimbabwe has always been a basket case while under the rule of Mugabe and his cronies. His indigenisation law law will put more money into his pocket and leave his people as poor as they have always been. You have to be naive if you think these resources are being transferred to the people.
Cristopher1975
Ridiculous. The idiots couldn’t run a root in a brothel never mind running a country. I suppose magabe gives half of his profits from his diamond mines to his people. Nothing but criminals.
Raviksinha Ravi
The process of indeginization has gradually started engulfing more & more of under develop ed countries also.It was bound to happen and rightly so; every country has got the first right over its resources.
In fact it happened in case of a developed country like Canada also.When BHP-Billton,the Australian mining major made a hostile bid to take over the potash mining companies under CANPOTEX a couple of years ago,it was foiled by the intervention of the Canadian Govt.
Ravi Sinha
drift123
! agree! A country should have control over its resources. However, this is the problem that I have; A foreign company signs an agreement to develop a resource such as a mine. The company uses its money and technical knowledge to develop the resource.
The cost to develop a profitable mine (or other resource ) can run in the Billions of U.S dollars. After the company spends all that money the country declares the agreement void and takes over the mine (or whatever developed resource).
The foreign company is not compensated for the cost it spent to develop the various resource. If the foreign company is compensated it is usually about a 1/10th of the actual value of the money spent.
I do not believe this is a way to gain trust from other countries or companies. In the long run the country is hurt by a lack of investment money from other areas of the World.
No company wants to risk having their assets stolen, so the country suffers from a lack of foreign investment with all of the consequences that go along with that such as poverty and a lack of good paying jobs.
Raviksinha Ravi
Yes,You have a valid point.The country which has spent a large fortune in the development of mine in any undeveloped or developing country has got the right to get back a reasonable percentage of the investment made.So the takeover law should be realistic not lop-sided.There should be scope for checks & balances.
Ravi Sinha