Zimbabwe drags Implats to court

Zimbabwe took Impala Platinum to court over compulsory acquisition of land claims the state argued were lying idle.

Harare - Zimbabwe dragged Impala Platinum (Implats) to court over compulsory acquisition of land claims the state argued were lying idle.

Read also: Zimplats faces fresh uncertainty in Zimbabwe

In its application to the Administrative Court, President Robert Mugabe’s government said the state intended to give these claims to new investors as the mineral rich but impoverished country intensified its takeover of “excess” land claims from mining companies.

“The right conferred to an applicant under a Special Mining Lease can, however, be compulsorily acquired by me as the President of Zimbabwe for a purpose beneficial to the public generally in terms of section 398(1) of the Mines Act,” Mugabe said in filed papers.

Contested

But Impala contested the bid, with executives raising concerns over growing cases of the government taking over mining properties.

Zimplats is Zimbabwe’s biggest platinum producer, while its South African parent, Implats, also jointly owns the Mimosa platinum mine with Sibanye Gold. This has sparked fresh concerns over property rights and land reserved for expansion of operations by producers in Zimbabwe.

Chrome producer ZimAlloys has also been informed of the government’s intention to take over excess land claims.

Zimbabwe’s Mines and Mining Development Minister, Walter Chidhakwa, is spearheading a “use it or lose it” policy that has seen him ask chrome and other producers in the country to release ground.

Zimplats has previously objected to government demands, prompting Mugabe to approach the courts to ratify the takeover of the land claims. Zimplats is also under pressure to build a refinery in the country, as well as comply with indigenisation through retaining 75 percent local content in the country.

Zimbabwe was using the Land Acquisition Act of the Mines and Minerals Act to take over land it claimed belonged to Zimplats, saying it had been lying idle for a lengthy period.

However, a chamber of mines executive told Business Report yesterday that excess land was key for expansion and new project purposes.

“There is what is called life of mine in mining and once a mine has attained this, a mining company can utilise its exploration activities on new ground for new mines or other projects,” the executive said.

Engagements between the government and Zimplats over the claims have thus far not yielded headway. Zimplats wants the court to shelve the application on technical grounds, charging that the court papers cited the wrong respondent and also erred in citing the size of the platinum claims under dispute.

Implats’ spokesman Johan Theron was not immediately available for comment. But earlier, Theron told Business Report that Implats, which is in a closed period ahead of its financials for the year to June, “expect(s) 2016 to be another difficult year” for the company and the platinum industry.

“To this end, it is imperative that we enhance our engagement with all other stakeholders to secure the best possible strategies to not only sustain our industry, but also support key stakeholders as best we can in these difficult times.”

Dividends

However, Mugabe – whose government also forced diamond producers to merge under a company in which the state would have half the shares – insisted that the Zimplats “land to be acquired will allow for the immediate entry of new players into the platinum sector“.

He also said this would help the government “receive dividends as it will be a shareholder in the new companies” and be allowed to exploit the mineral claims given up by existing operators. “The 27 948 hectares is in excess to its requirements and can be better utilised for the benefit of the populace,” Mugabe said in an affidavit accompanying the papers.

The court filing adds on to other court and other challenges the government is facing from diamond and other producers in Zimbabwe. ZimAlloys said it would fight the government over its bid to take over its mineral claims.

Mining ministry officials were not immediately available for comment. However, Mining ministry permanent secretary, Francis Gudyanga, said in a letter to ZimAlloys last month: “We we will (give) you up to (June 7) to present the claims.”

Implats shares fell 1.4 percent yesterday to R50.80.

BUSINESS REPORT