Platinum miner Zimplats on Thursday announced a $1-billion expansion plan for its mines in Zimbabwe, at a ceremony to mark its first step toward complying with a new local ownership law.
"The company has to date invested $700 million. It is in the process of establishing the second phase of our expansion plan which will cost $500 million," Zimplats chairman Dave Brown said at the ceremomy in Selous, west of Harare.
"After the completion of the expansion in 2014, further expansion including an underground mine and a concentrator valued at $1 billion will be undertaken," said Brown.
He spoke at a ceremony to launch a community ownership trust, which will hold a 10 percent stake in Zimplats and receive $10 million to begin undertaking projects to improve schools, roads and bridges.
"Today our dream has been realised. Zimplats community trust will acquire 10 percent shareholding in the company," said Brown.
Zimplats, a unit of South Africa's Impala Platinum which is the biggest foreign investor in Zimbabwe, is one of the first companies to take a step toward complying with a controversial law requiring foreign firms to cede 51 percent of their shares to locals.
President Robert Mugabe, the biggest defender of the legislation, said at the event the law was not meant to stifle foreign investment but increase the role of Zimbabweans in the economy.
"The indigenatisation and empowerment laws are not intended to stifle foreign investment. Far from it," said Mugabe.
"It is our vision to see more partnerships between indigenous Zimbabweans and non-indigenous investors," Mugabe said near one of the firm's mines.
Foreign companies in Zimbabwe were given until September 25 to present their plans to the government on how they will comply with the law. Zimplats was given an extension to comply fully with the law.
The equity law has created tensions within the country's shaky unity government, with Prime Minister Morgan Tsvangirai arguing that it will discourage investment.
Mugabe insisted that foreign investments in the county would be safe, if they meet the new requirements.
Mines and banks are the main target of the law.