Zimplats under-fire over intention to withdraw community share ownership trust

Platinum giant, Zimplats is reportedly working on withdrawing the community share ownership trust without consulting the local people of Mhondoro Ngezi, Chegutu and Zvimba who are supposed to be beneficiaries according to the provisions of the indigenisation laws.

This comes after a report on the intention by trustees of the Zimplats Mhondoro Ngezi Chegutu Zvimba Community Trust (ZMNCZ) 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 communities.

The Zimbabwean government introduced community share ownership trusts as a strategy to empower rural communities to propel their development. The move is based on the concept of Corporate Social Responsibility whereby corporates are obliged to plough back to the communities.

In a letter to ZMNCZ chairperson Chief Benhura, Ward 28 Chegutu Rural District Council councillor Tatenda Gwinji expressed concern over the issue.

“The communities of Chegutu, like those of Zvimba and Mhondoro Ngezi are aware that the ZMNCZ community trust was formed to make sure that they benefit from resources being taken from their area.

“A deed of trust was signed by the Government of Zimbabwe and Zimplats to make sure that these communities benefit from platinum mining in their area.

“The community trust was formed to guarantee that our communities benefit from owning 10% shares in Zimplats. Zimplats is required by the deed of trust, under clause 3.2, to dispose 10% to the communities. This is in addition to the USD10,000,000 the communities were given through their Community trust

“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.

“The report follows a meeting held sometime at the end of July this year at Chengeta Lodge and also understand that there was a board meeting of the trust held on 4 August 2022 to explain the outcome of the Chengeta meeting,” read the letter copied to Minister of Local Government and Public Works July Moyo, Minister of Industry and Commerce Sekai Nzenza, Minister of State for Provincial Affairs and Devolution Mashonaland West Province Mary Mliswa-Chikoka and Chegutu District Chiefs.

Gwinji further stated that, it could not 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. This is a manner that is of great importance to our communities and must be handled as such.”

He said that he took time to seek some advice and was told that the indigenisation law does not give power to mining companies to do away with their responsibilities to local communities.

“Amendments to the indigenisation law simply state that mining companies can comply ‘with or without’ community trusts. 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.

“Should you go ahead to amend and remove that right, then you are doing away with the community trust itself. The community trust was formed for the very purpose of ensuring that communities own 10% of Zimplats.

“If the expectation for 10% in Zimplats is taken away from the deed of trust, then there will cease to be any reason for the community trust to remain existing.

“Some of our chiefs currently sitting on the board of the ZMNCZ community trust had the opportunity to visit South Africa and see how platinum wealth has transformed the Royal Bafokeng community into a wealthy community.

“This community has become rich from Implats mining platinum there, why should Zimbabwe’s own communities be deprived of the same wealth being mined by Implats subsidiary of Zimplats here in Zimbabwe.

“Our constitution of Zimbabwe still requires that local communities must benefit from resources in their area, Taking away the communities expectation to acquire 10% in Zimplats goes against this very constitutional guarantee.

“If the communities own 10% in Zimplats they can easily pursue their own development including enterprise development. Recently we read about the Gwanda community which now fully owns its shares in gold mining Blanket Mine, and recently earned thousands of United States Dollars in dividend.”

Zimplats Holdings head-corporate affairs Sibusisiwe Chindove had not responded to the email sent to her before going to press.

Nehanda Radio understands that Zimplats achieved a record revenue breaking performance amounting to US$1,4 billion in the 2021 financial year with tax contributions and royalties amounting to US$404,6 million.

Last year, Zimplats declared a dividend of US$85,000,000 and communities’ 10% share would have been US$8,500,000.

The money would be used to develop and empower communities. But the company did not release any money in a clear breach of the law.

There are allegations that Zimplats bribed chiefs in the area to facilitate the move to withdraw the community share ownership trust.