November 24, 2017

Zim government forcing Zimplats to cede mining lease to the state

Mining companies in Zimbabwe are now in a state of panic after the government lodged a court application to force a subsidiary of Zimplats Holdings to sell almost 28 000 hectares of land stipulated in its mining lease to the state.

 The government’s rationale is that the land, owned by the state which was leased by Zimplats hasn’t been developed as was initially planned. This, according to the government’s affidavits filed in the country’s administrative court, proves that the land “is excess” to the company’s requirements.

In the affidavit, Zimbabwean Mines Minister, Walter Chidakwa, says: “Compulsory acquisition of the land is necessary for economic growth.”

The government refers to the document tendered by Zimplats in 2009 in which the company stated that it planned to spend $6.7bn over the next 20 years to produce about 1 million ounces of platinum a year. Instead, six years later, Zimplats produced just 190 000 ounces of the metal, which is mainly used to curb emissions from vehicles and as jewellery.

The government has said that it wants to put the land to productive use by building a 600-megawatt power plant, which it says will earn the state $3bn a year, on the land.

Meanwhile, Zimplats is countering the court application, arguing that the land isn’t surplus to requirements, contrary to government’s contention, according to its spokesperson, John Theron.  It lodged an objection to the proposed purchase as far back as March 2013.

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