ZIMBABWE's controversial indigenisation law, which requires foreign-owned companies to surrender 51% of their shares, is "flexible" and not to be construed as nationalisation or expropriation, Economic Planning and Investment Promotion Minister Tapiwa Mashakada says.
Mr Mashaka's remarks in Perth, Australia, at an investment conference yesterday came as Zimbabwe's Home Affairs Co- Minister Theresa Makone warned against the seizure of foreign banks, saying banks were the cornerstone of recovery from a decade of economic devastation.
Mr Mashakada tried to address concern about the Indigenisation and Economic Empowerment Act, which requires foreign miners to transfer 51% equity stakes to local black investors .
"Basically (the law) says that foreign investors are encouraged to seek a local partner from Zimbabwe and the local partner will have to seed for the value of 51%. That means if the local partner can't raise 51% of the capital cost for the project under the terms of the shareholding, there is no deal."
There would be no expropriation or nationalisation, Mr Mashakada said.
Last month several foreign mining firms, including Zimplats, a unit of Impala Platinum, and the Mimosa platinum mine owned by Aquarius, Rio Tinto's Murowa diamond mine and Caledonia's Blanket gold mine received letters directing them to submit fresh empowerment plans within 14 days or risk losing their licences.
The local units of British banks Barclays and Standard Chartered Bank and of British American Tobacco were also given the two- week ultimatum.
The deadlines expire today.
Ms Makone warned on Wednesday that grabbing or closing down foreign banks would damage the economy. "We still have very little experience and need to learn from those who are experienced like Barclays, Standard Chartered and Stanbic Bank. If we go and grab Barclays, what would we have achieved . because of other people's greediness?" she said in Harare.
On Wednesday World Bank country director Kundavi Kadiresan warned Harare that a lack of clarity on indigenisation laws and regulations was frustrating investment in the country.
If the local partner can't raise 51% of the cost . under the terms of the shareholding, there is no deal