ED Reverses The Indigenization Policy Amendment

The President who recently came back to work from his annual leave has hit the ground running after he reportedly reversed the Indigenisation Police amendment that reverted back to the previous administration policy on all minerals that was showing in the Finance bill amendment of 2020.

Just a single day after he comes back from his month-long vacation he has already reversed the amendment in the Finance Bill about the Indigenisation policy as evidenced by the joint statement that was released by the Ministry of Finance and The Ministry of Mines which stated that:

JOINT PRESS STATEMENT

CLARIFICATION ON INVESTMENTS IN THE MINING SECTOR

1. It has come to Government’s notice that the amendment to the Indigenisation and Economic Empowerment Act [Chapter 14:33] (IEE Act) contained in the Finance (No 2) Act, 2020 (section 36) may have caused some misconception to some investors and other stakeholders in the Mining Sector.
2. Government announced the policy position to remove the requirement for 51% of the shareholding of businesses involved in the extraction of Platinum and Diamonds to be owned through a designated entity. That requirement has been removed through the amendment to the IEE Act, in section 3(1).
3. There are no minerals the extraction of which require a business extracting same to have 51% of its shareholding being owned by a designated entity. This is consistent with Government’s position that there is no mineral, the extraction of which, Government considers requires mandatory shareholding participation through a designated entity.
4. The provision in Section 36 of the Finance (No 2) Act, 2020, to the effect that the Minister responsible for the IEE Act, may, in consultation with the Ministers responsible for Mines and Finance prescribe a mineral, the extraction of which would be subject to 51% shareholding by a designated entity, has been interpreted by some to represent a departure from Government’s stated position to open the mining sector to investment without the requirement for 51% of the shareholding being held by a designated entity.
5. To enhance certainty in relation to investments in the Mining Sector, and consistent with Government policy, this insertion will be deleted.
6. These amendments are designed to buttress the Mantra “Zimbabwe is Open for Business”

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02 February 2021