Proposals to nationalise foreign-owned companies in Zimbabwe may prove to be empty threats on the part of the government, the Chief Executive of Impala Platinum has said.

Under the terms of the proposed legislation, which was drafted by the government late last month, all foreign-owned firms must transfer 25 per cent of their shares to black Zimbabweans.

Should the regulations be approved, Impala Platinum, which owns more platinum assets in the country than any other platinum miner through its subsidiary Zimplats, would stand to be one of the firms to be heaviest hit.

However, according to David Brown, Impala Platinum's Chief Executive, the new legislation may not be enacted in practice and may simply have been conceived by President Robert Mugabe to court the populist vote.

He told the Financial Times: "We are hoping that it is more about electioneering than intent. But we cannot discount that it has an element of intent in it."

Mr Brown went on to express support for the principles behind Mr Mugabe's ongoing programme of black empowerment legislation, but questioned whether transferring 51 per cent of the firm's stock made for a feasible business model.

He explained: "We are firmly supportive of indigenisation principles. The number is the problem: 51 per cent is not practical. It means asking investors to fork out 100 per cent of the risk for 49 per cent of the return."

News of Mr Brown's comments comes as Impala Platinum recently announced it is to spend $340 million to boost output at its operations in Zimbabwe.

Source:

Cash-rich platinum producer shrugs off risks
http://www.ft.com/cms/s/0/901d0892-a2c3-11dc-81c4-0000779fd2ac.html?nclick_check=1

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