MHONDORO – Platinum mining giant Zimplats has been accused of conspiring with some traditional chiefs in Mashonaland West to dump payment of the 10% community share ownership levies prescribed by government on mining firms extracting resources within their areas of operation.
According to correspondence sent to Chegutu Rural District Council chairperson Tatenda Gwinji, Zimplats and chiefs from Mhondoro-Ngezi, Chegutu, and Zvimba attended a meeting in July this year at Chengeta Lodge allegedly to amend the community ownership trusts and make the Zimplats cede payment of the levies.
Gwinji, in a letter dated August 11 addressed to Zimplats Mhondoro Ngezi Chegutu Zvimba Community Trust (ZMNCZ) chairperson chief Benhura, charged the decision to make Zimplats cede payment of the mandatory fees illegally prejudiced local communities from benefiting from their natural resources.
“What has become a serious concern is the report on the intention by trustees of the community trust to undertake an amendment of the Deed of Trust so that Zimplats will now no longer be required to dispose of the 10% of its shares to our communities.
“It cannot be proper for the trustees of ZMNCZ Trust to make such an important decision of taking away the communities’ legitimate expectation of 10% shares in Zimplats without first consulting the beneficiary communities and key stakeholders such as the ministry of local government and our provincial authority.
“I have taken time to seek some advice and have been told that the indigenisation law does not give power to mining companies to do away with their responsibilities to local communities,” wrote Gwinji.
Community Share Ownership Trusts were established under the Indigenisation and Economic Empowerment Act with the goal of setting up Share Ownership Trusts (CSOTs) as vehicles of community development.
The trusts obligated foreign mining companies to transfer 10% of their shareholding to ensure local communities received dividends and were direct beneficiaries of their natural resources.
The Zimbabwean government in 2018 amended the Act through the Administrative Measures and the Finance Act to remove the 51% shareholding held by indigenous people, which the incumbent President claimed restricted foreign ownership of local businesses and discouraged much-needed investment.
Critics have accused foreign mining corporations of using the amendment to avoid paying the 10% community shares.
“Amendments to the indigenisation law simply state that mining companies can comply with or without community trusts,” Gwinji further wrote.
“It is not for board representatives of the same community trust to now want to interpret the new amended indigenisation provisions in the negative and prefer compliance without benefit to their own communities.
“The board of the community trust must also consider that if it removes the right of local communities to acquire 10% in Zimplats, then you are also doing away with the very reason for the existence of the community trust.”
Zimplats, a subsidiary of Implats, which is listed on the Australian Stock Exchange, in 2021 failed to pay its 10% community shares despite achieving a record revenue performance of US$1.4 billion with tax contributions and royalties totalling US$404,6 million.
Zimplats’ Head of Corporate Affairs, Busi Chindove was not picking calls when attempts were made to seek her comment.
