Impala Platinum’s request that the Zimbabwean government extend their deadline to cede almost 30 percent of its share in its Zimplats subsidiary to a state-run fund was refused by government officials on Wednesday.
Impala is the world’s second largest producer of platinum, and the 29.5 percent stake is valued at about $310 million at today’s prices. The Zimbabwe Youth and Empowerment ministry is orchestrating a series of moves in order to get local blacks to control majority shares in foreign companies. As such they are demanding Impala to hand over their shares, which so far they have refused to do, asking instead for an extension of the imposed deadline.
Impala and the Zimbabwean ministry met on Friday and Monday to discuss the issue, but were unable to move ahead with an agreement, an official of the government said.
On March 2 a letter was sent to Zimplats’ executives that there would be no chance for an extension of the deadline:
"You are advised that your request for a 30-day extension has been rejected by the honorable minister and your company is expected to comply with the law as stated in our February 22 letter," the letter stated.
It has not been made clear what steps, if any, will be undertaken by Harare if Zimplats and Impala do not comply with the government’s demands. Under the country’s “empowerment” laws, the government has the ability to cancel the firm’s rights to mining, or could even arrest its executives.
Zimplats has complied in the past with similar demands, already handing over a 21.5 percent stake to “local communities,” a trust fund for staff and a sovereign wealth group.
David Brown, chief executive of Zimplats, said that the company has no intention of leaving Zimbabwe, the world’s second largest platinum producer after South Africa.
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