Zimbabwe seeks 25 percent stake in foreign-owned mines

Zimbabwe seeks 25 percent stake in foreign-owned mines

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THE Zimbabwean government published a draft bill on Monday that would force foreign mine owners to sell 25 percent of their equity to the state or local investors.

"This section (of the Mines and Minerals Amendment Bill) sets out the objectives of the government to require every mining company... to make 25 percent of its shares available for acquisition by the state or indigenous Zimbabweans," reads part of the draft law.

The bill also defines strategic energy minerals which includes coal, coalbed methane, petroleum and uranium.

Existing laws that sought to give local investors a 15-percent stake in mining companies have failed to yield results as local investors have failed to raise the required capital.

Over the past three years, local investors have been battling to raise 31 million dollars (25.2 million euros) to purchase shares in the platinum-mining giant, Zimplats.

Doug Verden, chief executive of Chamber of Mines, described the draft law as unhelpful.

"If what we are seeing at first glance from the bill, then this is not helpful," he told AFP.

"However, we are still studying the bill and we will make an informed comment later this week."

In September, parliament approved the Indigenisation and Empowerment Bill which is designed to ensure that indigenous Zimbabweans own a 51 percent stake in foreign-owned firms.

Zimbabwe's mines, which produce gold, palladium, chrome, platinum and diamonds among other minerals, generate about 42 percent of the country's foreign currency earnings, according to the central bank.

The mining sector this year is projected to earn 707 million dollars. - AFP
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