behind the scenes deliberations

http://www.businesslive.co.za/africa/africa_markets/2011/09/09/worst-could-be-over-for-zimplats

09 September, 2011 11:53

"Worst could be over for Zimplats "

The worst part for Impala Platinum's Zimbabwe unit, Zimplats - which was this week said to be on the verge of losing its platinum group metals mining license - appears to be over, at least for now, following behind the scenes deliberations, which could see the group submitting a new indigenisation compliance plan.
There was a whirlwind of concerns and fears during the week that the company's investments in the country were under threat after Zimbabwe empowerment minister, Saviour Kasukuwere, said the company had failed to comply with a controversial empowerment policy. Impala's shares on the JSE were hit by this development in day trade on Thursday.

But some positive developments appeared to have happened underground as it has now emerged that Zimplats will now have to submit a new compliance plan. Another positive for the company's bid to stay afloat in Zimbabwe also came during the week after empowerment minister Obert Mpofu refused to endorse Kasukuwere's threats of expulsion against the company.

"Our teams are now working with some mining companies that have asked for more time to work on their new proposals and we will keep the public updated on the developments," said Kasukuwere, in sentiments believed to have been in reference to Zimplats and Mimosa, jointly run by Zimplats and Aquarius Mining.

Information at hand from authoritative sources shows that there have been intense background negotiations between the empowerment ministry and Impala and Zimplats officials. The purported pending cancellation of Zimplats' license, said the sources, had also raised concern among other Zimbabwean government officials.

Late yesterday, Zimplats commented on the issue for the first time, and said the license had not been cancelled. Zimplats deputy chairman, Muchadeyi Masunda said the company was not against the government's empowerment drive but called for clarity on the issue.

"As a company, we have never said that we are opposed to indigenisation and the empowerment of the people. We're very clear on that," he said. He added that Zimplats was committed to its Zimbabwe investments and that it was "not in anyone's interest for a world-class operation such as ours to be stopped by any closures" as this could also lead to "massive" job losses.

Zimplats reportedly employs over 4,000 workers at all its mines and ventures in the country. Labour representative unions in Zimbabwe are also said to have weighed into the debate, raising concern over the fate of their members. They are said to have approached the government over the issue.

Zimplats is Zimbabwe's largest platinum producer and Implats has lifted its stake considerably from just 36% in 2002. There is a lot at stake as Zimplats trebled its profit to US$85 million for the six months to December 2010, while in 2007 it had reported a 217% surge in profits.

The only major area of disagreement is the implementation, in its current form, of the Release of Ground Agreement of 2006. The government acknowledges the existence and validity of the agreement, but wants to renegotiate certain terms thereof," said Zimplats