Foreigners key to Zimbabwe mine growth

Foreigners key to Zimbabwe mine growth - chamber

• Political patronage threatens Zim mines

• Zim clarifies Mugabe mine-grab policy

• Mugabe wants 50pc shares in mines

• Anglo America mining rights revoked

• Mugabe gives 49pc mining rights to blacks

• Mnangagwa in dirty gold scam

By Staff Reporter

ZIMBABWE'S Chamber of Mines said it would respond within a week to proposed legal amendments giving President Robert Mugabe's government a 51 percent stake in foreign mines, but hinted the move could undermine growth.

In a statement to the Chamber of Mines on Friday, Mines Minister Amos Midzi said cabinet had approved amendments to the mining law "to indigenise 51 percent in some instances of all foreign owned companies."

Midzi's statement said the amended law would give the government 51 percent in "energy minerals mining companies", including 25 percent on a "non-contributory basis", immediately upon promulgation.

Industry officials say a non-contributory basis means the government would acquire the shares without paying for them. The balance of government ownership would be achieved within five years.

The government would also adopt a similar structure with precious metals and gemstones, and share 51 percent ownership with local groups in the gold and emerald sector.

Implats, the world's second biggest platinum producer, hopes Zimbabwe will respect a current mining deal and not demand a majority stake in its local unit, a top official said on Monday.

Zimplats Ltd the Zimbabwean unit of Implats, said on Monday it was in talks with Mugabe's government over the new draft.

Midzi said the new draft would be put out for comment from industry before being placed before parliament, where Mugabe's ruling ZANU-PF party holds a comfortable majority and could easily pass it into law.

On Monday Chamber of Mines President Jack Murehwa said the sector would make representations to the government stressing that any new legislation should take into account the importance of foreign investment for growth.

"The mining companies in Zimbabwe are not large enough to expand production facilities or finance green-field projects from their cash-flows," Murehwa said in a written response to questions from Reuters.

"Irrespective of what the final outcome on the debate on legislation is going to be, mining companies in Zimbabwe are going to have to raise capital to grow the industry from international sources in the main," he added.

The mining sector remains one of few in Zimbabwe with a significant level of foreign involvement after Mugabe's controversial seizure of white-owned commercial farms for blacks sent many international investors scurrying for cover.

As well as Impala Platinum, Anglo American Platinum Corp and mining giant Rio Tinto have interests in Zimbabwe.

Leading private economist John Robertson said the proposed amendments would keep new investors at bay, worsening an economic crisis showing itself in chronic food, fuel and foreign currency shortages, soaring unemployment and the highest inflation rate in the world - Reuters
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