This is what happened to the farms. The mines may be next

A DECADE ago Robert Mugabe’s regime seized most of Zimbabwe’s white-owned commercial farms. The president promised to give the land to the landless, but instead gave much of it to his wealthy cronies. The country’s largest industry was wrecked, creating deadly food shortages.

Now for the encore. In 2007 a law was passed obliging all white- and foreign-owned companies to “cede” a 51% stake to black Zimbabweans. Despite Mr Mugabe’s record, many firms ignored the threat. That was a mistake.

Saviour Kasukuwere, Mr Mugabe’s indigenisation minister, has now sent an ultimatum to a dozen foreign-owned groups. Those that do not comply may lose their assets and operating licences. Their directors may be jailed. The victims include six miners, notably Rio Tinto’s Murowa Diamonds and Impala Platinum’s Zimplats; two banks, Standard Chartered and Barclays; and three manufacturers, British American Tobacco, Nestlé and Cargill Zimbabwe. The deadline for submitting compliance plans was the end of August; for implementing them, it is the end of September.

Mr Kasukuwere, a rising political star, clearly wishes to appear tough. The law allows firms to perform good works in lieu of surrendering equity, but Mr Kasukuwere will have none of this. He also rejects an idea, floated by Zimplats, that firms could sell their shares to black Zimbabweans by listing them on the stock exchange. Instead, he wants them to give a 51% stake to a sovereign-wealth fund, with no guarantee of any compensation. All mines worth more than $1 are affected. “The minerals…already belong to us,” smiles Mr Kasukuwere, “so why should we pay?”

David Brown, the boss of Impala Platinum, says he is “confident that the 51% will not happen” and that a “more appropriate level of ownership” will ultimately be agreed. Otherwise, foreign investment in Zimbabwe will drop off a cliff and sink beneath the waves.

Some companies are considering suing Mr Kasukuwere for exceeding his legal powers. A parliamentary committee dominated by Mr Mugabe’s opponents says that he has. But relying on the rule of law in Zimbabwe is like asking a crocodile not to eat you. As an industry expert furiously puts it: “This is pure plunder—just like the farms.”