Aquarius Platinum Ltd. (AQP), the fourth- largest producer of the metal, declined the most in more than a year after saying Zimbabwe’s government rejected a proposed plan by its Mimosa Holdings unit to sell stakes to black Zimbabweans as required by law.
The stock fell as much as 14 percent, the biggest intraday slump since July 2010, and closed down 6 percent at 27.27 rand by 5 p.m. in Johannesburg.
Mimosa received a letter on Aug. 19 from Indigenization Minister Saviour Kasukuwere that rejects Mimosa’s plan and requires the company to submit a revised proposal by the end of August, the company said in a statement today. Aquarius owns 50 percent of Mimosa and earned 25 percent of its revenue from the operation in the year through June, according to its website.
“The majority of the concerns are probably largely priced in; there isn’t going to be a speedy resolution given the divided nature of the government in Zimbabwe,” Edward Sterck, an analyst at Bank of Montreal, said by phone from London. “Given the number of companies they need to have a dialogue with it’s not going to be a quick one and I don’t think the government is putting forward suggestion on how this will be achieved.”
Zimbabwe has the world’s second-biggest platinum and chrome reserves after South Africa. Zimbabwe issued a March 25 decree giving foreign companies 45 days to explain how they will sell 51 percent of their assets to citizens of the country. The decree followed approval of the Indigenization and Empowerment Act.
About 700 companies have submitted their indigenization plans to the government, the Herald said on Aug. 1. If accepted, the companies have five years in which to dispose of their shares, according to the government.
To contact the reporter on this story: Stephen Gunnion in Johannesburg at firstname.lastname@example.org