In the wake of Zimbabwe’s recently completed presidential election, the victorious Zimbabwe African National Union-Patriotic Front (ZANU-PF) of long-time President Robert Mugabe is moving ahead with campaign promises to take a controlling stake in the country’s foreign mining concerns.
The plan calls for foreign companies to hand over a controlling stake, at least 51 percent of their assets, to the government, according to Saviour Kasukuwere, the minister overseeing the program, and without compensation. Kasukuwere asserted in an interview in the capital Harare on Tuesday that, “Zimbabwe will not pay for her resources,” and that companies who refuse to comply could have their operating licenses revoked.
The plan echoes land reforms that were implemented by Mugabe shortly after the turn of the century, which required the country’s minority white farmers, whose continued control of Zimbabwe’s best soil was a leftover from colonial times, to forfeit their property without any guarantee of reimbursement.
A number of mining companies could be hurt by the new initiative, as was be seen by the reaction on the over-the-counter markets. Anglo American Platinum Ltd. (AGPPY) was down 3.3 percent to $5.88, Impala Platinum Holdings Ltd. (IMPUY) was down 3.45 percent to $9.90, and on the New York Stock Exchange, Barclays PLC (BCS) was down 0.25 percent to $17.41.
According to Mugabe and the ZANU-PF, the plan comes as part of an effort to increase black ownership of the economy over the next five years. Metals and minerals mining accounted for over 71 percent of the country’s exports over the first quarter of 2013, nearly $720 million, and other industries will likely be affected, as the government has identified over 1,000 foreign companies that will be targeted by the new regulations.
The 89-year old Mugabe has headed Zimbabwe’s government in some capacity since the early 1980’s, and has over recent years encountered considerable resistance at the ballot box from long-time opposition candidate Morgan Tsvangirai. He won the most recent round of elections last week by a landslide, however, and has promised to step down from power after his current term is finished.