Resource group Mwana Africa today came under attack from the Zimbabwe government for changing the board and management of its two local subsidiaries saying this will negatively affect the implementation of its indigenisation law.
Zimbabwe’s Indigenization Act – enacted in 2008 – requires foreign owned companies valued at over $500 000 to cede 51 percent to black locals and has been cited as a major impediment to foreign investment in an economy battling to recover from a decade-long recession.
Last Friday Mwana Africa fired several staff, including consultants with more to come up in a shake-up that also claimed its founding chief executive, Kalaa Mpinga last month.
It said the dismissals were designed to lower overhead costs and change its working culture.
Mpinga left the company he founded on June 10, a day after a crunch extraordinary general meeting which ousted his allies on the board, South Africans Stuart Morris and Johan Botha and Zimbabweans Ngoni Kudenga and Herbert Mashanyare.
They were replaced by Scott Morrison, Mark Wellesley-Wood, Oliver Barbeau and Anne-Marie Chidzero while majority shareholder, China International Mining Group Corporation (CIMGC)’s chairman Yat Hoi Ning took over as executive chairman.
The group has operations in Zimbabwe, South Africa, DRC, Angola and Botswana. Its operating subsidiaries, however, are predominantly in Zimbabwe – Freda Rebecca Gold Mine and Bindura Nickel Corporation (BNC) – with its Klipspringer Diamond Mine in South Africa yet to take off.
Indigenisation minister, Christopher Mushohwe told journalists today that government had noted with “serious concern” the changes.
“The manner in which the composition of the board and management of Freda Rebecca Gold Mine, the largest single gold producer in the country has been changed, is of concern to the government of Zimbabwe,” said Mushohwe.
“The implications of the changes have negatively impacted on the strides attained to date with regards to the implementation of the indigenisation economic empowerment thrust.”
He said the shareholding agreements between the government and the owners of BNC may not have been observed while Freda Rebecca Gold Mine had not complied with the law.
Brainworks Capital, an advisory firm hired by government recently told Parliament that only one indigenisation deal had been consummated by government, while transactions worth over $1 billion with major platinum mining firms Anglo American Platinum, Impala and Aquarius had been abandoned.
In January this year, government, however, gave business 60 days to amend indigenisation agreements with the state as part of changes to the law.
Mushohwe said refurbishment of the smelter and the refiner, had been put on halt.
“In view of the above, the government of Zimbabwe has instructed the National Indigenisation and Economic Empowerment Board (NIEEB) to immediately invite the executive management of Mwana Africa to come to Zimbabwe and engage the government with respect to immediate compliance with the Indigenisation and economic Empowerment Act,” he said.
Mushohwe however declined to take questions on the matter.-The Source