“Government published the General Notice 114 of 2011 on the 25th of March 2011, which represents the legal framework for the indigenisation of the mining sector. The Notice defined the minimum indigenisation and empowerment quota as 51%.
“All mining companies that have not complied with this notice should note that 51% of their shareholding is now deemed to be owned by the State and any business transacted in respect in this 51% shall have been transacted on behalf of the Government of Zimbabwe with effect from the deadline stipulated,” read in part the government notice on Thursday.
The notice is signed by the Minister of Youth Development, Indigenisation and Empowerment, Saviour Kasukuwere.
Kasukuwere said all profits and losses accrued by the mining companies that did not comply with the black indigenisation law shall be shouldered by the State.
“Any profits accruing to this 51% should be regarded as property of the State and any losses incurred will be charged against the company’s’ assets, less the 51% indigenisation portion.
“Companies are hereby advised that they are now dealing with assets of the State in respect to the 51% indigenised portion and any attempt to defraud the State will result in prosecution,” Kasukuwere added in the notice, saying all Zimbabweans should defend the 51% stake.
The unexpected move is set to send shockwaves in the business and political sector.
The wobbly inclusive government is divided on the indigenisation programme with Zanu PF, which has structural power, in support of the drive, while the MDC formations argue the policy encourages company grabbing at the expense of direct foreign investment and job creation.
The indigenisation law, analysts have said it will scare the much wanted investment in the country which has been struggling to grow its economy and bring jobs.
The controversial law orders foreign-owned companies — such as mines, banks and retailers — to submit plans on how they will give up a majority share to locals.
But the government has yet to come up with a clear-cut explanation how it will pay for the shares taken or even how the process will be undertaken.
The confusion comes as Zimbabwe seeks massive investments to rebuild its economy, which was devastated by a violent land reform programme in which white-owned farms were seized.