Zimbabwe has said it sees no need to change current ownership rules on platinum and diamonds, causing disappointment for many miners.
The announcement was a disappointment to miners who held hope that the country would open up ownership as it announces mineral frameworks in coming weeks.
Platinum and diamonds were left out of revisions to the South African country’s empowerment law once already this year, with President Emmerson Mnangagwa stating, “Zimbabwe is open for business and whoever stands in the way, hurting business in this country, will fall. It is not business as usual anymore, things have to change.”
In March 2018, Zimbabwe made changes in order to limit majority ownership by state entities in mining projects in a move to attract more foreign investment to the country, but did not extend the new rules to platinum and diamond mines.
Winston Chitando, minister of mines and mining development, told Reuters there would be “no change for diamonds and platinum” when asked about ongoing speculation the indigenization rules may become more relaxed in the near future.
Despite Chitando’s comment, an official from a junior miner developing a project in Zimbabwe, revealed that he believed there could be flexibility in the law for those miners that made moves to invest heavily in the local community.
In fact, Zimbabwe has held several conferences in Africa and London since the overturning of long-term leader Robert Mugabe in late 2017. These events have insiders speculating that the southern African country could become more investor-friendly.
Chitando has proclaimed that progress has been slow in striking a balance between protecting Zimbabwe and working with miners in order to increase the country’s bottom line. He noted that the country was determined to bring about change and over the coming weeks would roll out policies for various minerals, including platinum, diamonds and even gold.
While platinum has had a rough year, Zimbabwe maintains faith in the precious metal and at the end of March of this year, the south African country signed a US$4.2-billion deal with Cyprus-based Karo Resources to develop a platinum mine and refinery.
Although the first output of platinum-group metals isn’t expected until 2020, work began on the mine in July. Chitando noted that the mine is forecast to produce 1.4 million ounces annually within three years.
Karo Resources is expected to continue to comply with the empowerment law and has already given up majority ownership in the project.
As of 4:01 p.m. on Tuesday (November 27), platinum was down 1.19 percent, trading at US$832 per ounce.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.