20 Sep 2019
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Zimbabwe govt officially amends indigenization law, limiting majority ownership by the state to diamond, platinum mines
Only state-owned mining entities will hold majority shares in diamond and platinum companies.
By: Diamond World News Service
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Mar 26 2018 10:56AM
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Reference: 16206  

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The Zimbabwe government has officially amended the Indigenization and Economic Empowerment Act to limit its application to designated diamond and platinum extraction businesses.

The amendments, contained in the Finance Act, which was published in a March 14 Government Gazette Extraordinary, also extend ownership of businesses in the 12 reserved sectors to "citizens of Zimbabwe" as opposed to "indigenous citizens."

Non-citizens who commenced business before Jan. 1, 2018, are allowed to continue, subject to registering with both the Zimbabwe Revenue Authority and the newly created Indigenous and Economic Empowerment Unit and Fund.

The new fund will be housed within the designated ministry and staffed entirely by members of the civil service. It replaces the former National Indigenization and Economic Empowerment Board, which functioned as an autonomous body outside the civil service framework, says a news report.

Only state-owned mining entities will hold majority shares in diamond and platinum companies. However, existing businesses do not need to immediately comply with the law as they can negotiate a timeline of compliance with the authorities.

Foreign investors are allowed to have full control in any other mining venture, the notice said.

In addition, the continued operation of businesses by non-citizens in designated areas will be subject to them opening and maintaining bank accounts in accordance with the law.

The three designated entities are the Zimbabwe Mining Development Corporation, the Zimbabwe Consolidated Diamond Company and the National Indigenization and Empowerment Unit and Fund.

Ownership can be with or without the participation of a community share-ownership scheme or employee share-ownership scheme or trust.

Non-citizens wishing to open businesses in a reserved sector after Jan. 1 must get permission from the responsible minister, which will only be granted in certain circumstances, mentioned the news report.

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