Investors in S. African Mining Firm Urge It to Put Zimbabwe Investments on Hold
Roderick Fayayo said South African firms may be at risk under Zimbabwean indigenization despite a bilateral investment protection pact
African Rainbow Minerals sources said Anglo-Rand Financial Services and three other major shareholders have expressed opposition to the company’s plans to invest in platinum and gold mining operations in Zimbabwe Shareholders of African Rainbow Minerals, a South African company, are urging its managers to put the firm's Zimbabwe investment program on hold following the implementation of Zimbabwe’s Indigenization and Economic Empowerment Act this week. Company sources said Anglo-Rand Financial Services and three other major shareholders have expressed opposition to the company’s plans to invest in platinum and gold mining operations in Zimbabwe. African Rainbow Minerals directors recently met with Mines Minister Obert Mpofu to follow up on a 2009 application to invest in the country. The firm had planned to make the investment this April. Economist Eric Bloch said many other companies may put their Zimbabwe investment plans on hold for fear of suffering capital losses through indigenization. “Almost every foreign investor has put their intentions on hold because they find these indigenization regulations so dominating that they are not prepared to put their investments at risk at this stage," Bloch told VOA Studio 7 reporter Gibbs Dube. But he said some foreign investors and managers think certain Indigenization Act provisions may be modified so that non-Zimbabwean companies do not have to cede a 51 percent interest to black Zimbabweans. He noted that about 120 business people who attended an investment conference Monday in Harare said they will monitor the situation before committing funds. Bulawayo-based political commentator Roderick Fayayo said South African firms may be at risk of share seizures under Zimbabwean indigenization despite the Investment Promotion and Protection Agreement signed late last year by both countries.