Demystifying Zimbabwe's Mining Sector Indigenisation Policy - "A focus on the 51/49 Policy Part 2"

My primary motivation for developing this page is to increase the knowledge of ordinary people in the rich mineral endowment of their country and hence be well equipped to fully participate in the mining sector. Zimbabwe has only recently legislated some of the most liberal mining sector investment regimes in the world, with entry barriers being removed significantly for the ordinary man and woman. Through the country's famed indigenisation and economic empowerment policy thrust, the government has introduced various initiatives to improve locals participation into the mining sector. 

Initiatives such as the 51/49 ownership structure in the minerals mining sector goes a long way to opening up more participation by the general public in typically capital intensive industries such as mining. This principle dictates (by way of a law/legal statute) that any and all prospective investors into Zimbabwe's minerals mining sector must partner with locals, who are anticipated to hold the majority shareholding at a minimum threshold of 51% local ownership and 49% foreign ownership. What this simply means is that locals are expected to hold no less than 51% of the total share capital of any foreign sponsored mining venture. Therefore, foreign partners can be introduced with a MAXIMUM ownership of up to 49% of the company's total shares. These provisions are timely for the mining sector if the country is to avoid what the Economic Commission for Africa and the African Mining Vision refer to as "holes in the ground."

Further, initiatives such as the Joint Ventures Act now mean that any foreign company wishing to invest in the Zimbabwean mining sector can meaningfully partner with the government in a form of "Public-Private-Partnership" with the government's mega mining sector investment and minerals development company, the Zimbabwe Minerals Development Corporation (ZMDC).

On the other hand, the Sovereign Wealth Fund aims to ensure inter-generational equity for the citizens of the country and the future generations while also inculcating a savings culture. This provides a useful source of capital which can be invested (by loan) for infrastructural development in the country thereby also helping in improving the condition of the economic enablers for the economy. Innovative approaches can be used to hypothecate these captures savings for developmental goals and aims.

Review of Mines and Minerals Act - outstanding since 2007