Image: Gallo

No Caption

The ongoing Utho Capital organised Zimbabwe Mining Indaba in Zimbabwe's capital, Harare, has brought government officials and mining sector investors face to face. Although this was always going to be a heated affair, government officials grabbed the opportunity and struck a friendly tone as proceedings opened.

First up was mines minister, Obert Mpofu, who sought to calm nervy investors by declaring - just as central bank governor Dr Gideon Gono had done a few days ago with banks - that his ministry had no intention of cancelling mining licenses. Last week, he told BusinessLIVE that he was unaware that Zimplats could lose its license for non-compliance with an indigenisation law.

"There are some negotiations taking place with certain parties but no license has been cancelled. We have no intention of cancelling licenses," said Mpofu, much to the relief of mining executives and other investment officials.

But amid the glee and cheerfulness, there was still an air of distrust, especially with regards to whether the Zimbabwe government could still be trusted. Someone whispered words to the effect that this tone could be changed any time it suited the government's ends and that one never knew exactly what would happen when the rules of the game were so undefined.

This remains Zimbabwe's major problem in its bid to court foreign investors and revive its struggling economy, which has been hit by plummeting investor confidence.

With everyone bracing for yet another outburst, as was usually the case whenever he talked, the outspoken and highly verbose empowerment minister, Saviour Kasukuwere surprised most, changing his tone and deviating from his usual banter.

He spoke of the progress that had so far been made with regards to the empowerment policy, which was increasingly becoming "polarised".

"With the mining industry, we've had our running battles, but now we've made tremendous progress," he said. He may have been referring to the spat over Zimplats, owned by leading platinum miner, Impala Platinum.

This week, the government and Impala Platinum agreed that Zimplats would submit a new compliance plan by November 15. Word in some circles was that Kasukuwere was told to accommodate Zimplats, the major mining sector investor Zimbabwe currently has.

But the empowerment minister's near apologetic tone did not end there. Where he had previously said there was no going back or revising of the current format of the law's statutes, he admitted that there could be some special cases, such as Zimplats, where the mandatory thresholds may be waived.

In its current format, the law says all foreign firms should give up 51% majority equity to black citizens, although this could end up benefiting well-connected government officials and Zanu PF allies.

"When there are exceptional circumstances, we'll look at those circumstances in a manner that allows our country to move forward. We are aware of the capital requirements in mining; we are alive to those realities," he said.

Although this may have diluted the grim view investors have towards Zimbabwe, it did not undo the scepticism, especially that around the government's unpredictability in terms of policy formulation and implementation that previous statements by Kasukuwere and President Robert Mugabe might have occasioned.

Indeed, there is a need by Zimbabwe government officials to set the record straight with this policy, and if need be, put it to rest.

"There are still issues to do with the negative sentiment that investors have towards Zimbabwe. There is no guarantee. These statements could be brushed aside at any time and officials could well revert back to their populist rhetoric," said one delegate attending the conference.

As mining executives, government officials, including Finance Minister, Tendai Biti - due to address the conference - and other concerned parties tackle the second day of the conference and the final day on Friday, one thing is uppermost in the minds of investors and other major players in the country's economy: the government must provide the right regulatory, operating and investment climate.