Zimbabwe Revises Rules On Foreign Firm Takeovers

Harare, June 23, 2010 - Zimbabwe has revised rules requiring foreign firms to tranfer majority control to local blacks, with varying shareholding thresholds being set for different sectors of the economy, a minister said on Tuesday.

The unity government of President Robert Mugabe and Prime Minister Morgan Tsvangirai was deeply divided earlier this year after the publication of regulations forcing foreign-owned firms, including mines and banks, to transfer a 51 percent stake to black Zimbabweans.

But Mugabe told a mining conference last month that the government was refining the controversial law in a bid to shore up desperately needed investment.

Indigenisation and Economic Empowerment Minister Saviour Kasukuwere told reporters the government would publish amended regulations on Friday detailing how foreign firms should achieve majority control by locals.

Kasukuwere, a Mugabe ally, said the amended rules were agreed by the unity government after "extensive consultations."

"We've agreed on the process of setting up committees to look at sectoral (shareholding) thresholds, time-frames or any other issues that relate thereto," Kasukuwere said.

The committees would give recommendations to government within three months.

"It's not a one-size-fits-all policy. We will be able to accommodate companies. The other area of concern was the term 'cede', which has been amended to 'disposal', which means disposal for value," said Kasukuwere.

Mining industry officials have urged the government to consider each economic sector's specific capital requirements when applying the empowerment law.

The country's Chamber of Mines has proposed a minimum 15 percent shareholding for locals, with empowerment credits being awarded for firms' social and infrastructural investments.

"The mining industry must be ready to do much more than they are proposing," Kasukuwere told reporters.

The world's two largest platinum miners, Anglo Platinum and Impala Platinum have mines in Zimbabwe, while Rio Tinto has diamond interests in the country.

The rules, issued under an Indigenisation and Economic Empowerment law passed in 2007 by a parliament dominated by Mugabe's ZANU-PF, require foreign firms with assets worth $500,000 or more to sell 51 percent of their shares to black Zimbabweans within five years.

Kasukuwere said companies had up to June 30 to provide the government with plans on how they would comply with the law, adding that more than 600 companies had so far submitted proposals. Reuters