May 19 2010 15:23
Harare - Zimbabwe's Chamber of Mines on Wednesday proposed a compromise in the government's drive to force foreign firms to give a 51% stake to locals, saying 15% local shareholding for mines was enough.
Chamber president Victor Gapare said government should recognise that most mining companies built schools and roads in the areas where they operate, benefiting nearby communities.
"From a broad-based empowerment point of view, you have to look at things like schools, hospitals, roads and all the developments which takes place around mining communities, and in our minds that's true empowerment," Gapare told a news conference.
An indigenisation law that took effect on March 1 requires foreign firms valued at more than $500 000 to cede at least a 51% stake to locals.
Firms had been given 45 days to report their efforts at complying, but the deadline has been extended indefinitely.
The government says mines will be the law's first target, but Gapare said Harare should consider requiring only 15% local shareholding.
"The position which we put together says a minimum of 15% equity," Gapare said. "The rest to make up 51% will be in the form of social responsibility programmes" like building schools and hospitals.
"The mining companies are finding it very hard to attract capital. What we hope is that as the perceived country risk of Zimbabwe comes down, companies will be able to attract capital," he said.
In the first month after the law was published, Zimbabwe's stock market fell about 10%, while mining shares dropped 20%.