Zimbabwe’s government is preparing a law that would allow it to seize controlling stakes in companies without compensation, according to a draft of the legislation obtained by Bloomberg News.
The law would be an amendment to a 2007 act that compels foreign and white-owned companies such as Rio Tinto Group (RIO), Sinosteel Corp. and Impala Platinum Holding Ltd. (IMP) to sell or cede 51 percent of their shares to black nationals or state-approved agencies.
“The motivation for this position arises out of the desire to ensure that the people of Zimbabwe benefit fully, and without cost whatsoever, from enterprises that exploit their God-given natural resources,” according to the draft law.
Zimbabwe, which has the world’s second-biggest platinum and chrome reserves, endorsed a new constitution in a referendum last month, paving the way for elections, which must be held before Oct. 31.
Anglo American Platinum Ltd. (AMS) and Impala have agreed to cede stakes in their local units. The government is in talks with banks including Barclays Plc (BARC) and Standard Chartered Plc (STAN) about their compliance with the current local ownership law.