For­eign min­ers to in­vest in devel­op­ment

Chronicle (Zimbabwe) - - Business - Harare Bu­reau

AMEND­MENTS to the cur­rent leg­is­la­tion gov­ern­ing Zim­babwe’s min­ing sec­tor will re­quire for­eign listed min­ing firms to in­vest over 85 per­cent of funds raised off­shore to­wards de­vel­op­ing lo­cal mines.

This forms part of new pro­vi­sions in the Mines and Min­er­als Amend­ment Bill, presently go­ing through Par­lia­ment, which also re­quires pub­lic com­pa­nies to have the ma­jor­ity of their shares listed on the lo­cal stock ex­change to be given a min­ing rights or ti­tle.

The new mines leg­is­la­tion em­pow­ers Zim­babwe’s Min­is­ter of Mines and Min­ing Devel­op­ment to can­cel the min­ing right or ti­tle of any com­pany dis­cov­ered to have fal­si­fied in­for­ma­tion on their listing and the util­i­sa­tion of pro­ceeds from such listing.

Zim­babwe has only four min­ing com­pa­nies listed on the lo­cal stock ex­change de­spite the cen­tral im­por­tance of min­ing to the econ­omy and Gov­ern­ment’s push for lo­cals to ben­e­fit from the ex­ploita­tion of the min­er­als as a fi­nite nat­u­ral re­source.

The min­ing sec­tor con­trib­utes about 12-16 per­cent of Zim­babwe’s Gross Do­mes­tic Prod­uct and ac­counts for more than half of the coun­try’s ex­port earn­ings while it em­ploys thou­sands of peo­ple.

“Any com­pany that re­quires a min­ing ti­tle, which is listed on a for­eign ex­change (out­side Zim­babwe) shall be obliged to no­tify the min­is­ter of such listing and eighty five per cen­tum of funds raised from such listing shall be used solely for the devel­op­ment of the min­ing rights and ti­tle in Zim­babwe.”

The mines and min­er­als leg­is­la­tion says any­one who breaches the re­quire­ment shall be guilty of an of­fence and li­able to a fine equiv­a­lent to one hun­dred per­cent of cash raised at the for­eign listing or to im­pris­on­ment for a pe­riod not ex­ceed­ing 10 years or both such fine and prison term.

The law also re­quires hold­ers of Zim­babwe min­ing right or ti­tle to ex­clu­sively use financial in­sti­tu­tions reg­is­tered to carry out bank­ing ac­tiv­i­ties in terms of Zim­babwe’s Bank­ing Act or any re­lated leg­is­la­tion in con­duct­ing trans­ac­tions re­lat­ing to its min­ing.

Also, no min­eral (in­clud­ing in­dus­trial scrap) de­rived from Zim­babwe shall be ex­ported raw or un­pro­cessed ex­cept with the writ­ten con­sent of the Min­is­ter to the ex­porter: pro­vided the min­is­ter shall pre­scribe ex­emp­tions and ap­pli­ca­ble taxes thereof in terms of set down rules.

Any min­ing com­pany hold­ing a min­ing ti­tle or right shall no­tify the Mines Min­is­ter in writ­ing, of changes in its share­hold­ing struc­ture within four­teen days of such change in the firm’s share­hold­ing.

Sub­ject to any other law, the draft bill says no share­holder of a com­pany hold­ing a min­ing right or ti­tle shall sell, dis­pose of or trans­fer a Zim­babwe reg­is­tered security to a non­indige­nous per­son with­out writ­ten ap­proval of the Min­is­ter of Mines, with any such sale, dis­posal or trans­fer done with­out the min­is­ters ap­proval re­garded as void.

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