HomeBusiness DigestGovt just won't back down on mine seizures'

Govt just won’t back down on mine seizures’

ZIMBABWE will not back down on proposed changes to its mining laws which will give the state a majority stake in foreign-owned firms, a minister said yesterday.

”There is no going back on the 51% mining ownership structure policy for the government and 49% for outsid

ers,” Deputy Mines minister Tinos Rusere told AFP.

“There have been various submissions with some proposing a 30% stake for locals but there is no going back on what we have said.”

“Very soon the actual (Mining and Minerals Amendment) Bill will be tabled in parliament to clarify everything,” he added.

President Robert Mugabe last week sought to reassure mining firms in Zimbabwe over the proposals, saying they would not lead to property grabs. Platinum mining giant Zimplats has met with Mugabe to try to persuade the government to reduce the proposed 51% stake for the state to 30%.

“At least 30% being offered is out of the question,” Rusere added. Zimbabwe is in the throes of an economic crisis, with inflation topping 1 000% and severe shortages of fuel and food.

A key pillar of the economy along with agriculture, the mining sector last year accounted for 44% of Zimbabwe’s total foreign currency revenues, according to Reserve Bank figures. The sector employs close to 45 000 workers.

“We made an offer of 30% to the government and we are still waiting for a response,” Jack Murehwa, Zimplats’ spokesperson said. South Africa’s Implats owns 86,9% of Zimplats, which operates Zimbabwe’s only platinum mine. It produced 494 tonnes of platinum last year.

Under current laws, locals are entitled to a 15% stake in foreign-owned mining ventures, but only a handful of takers have come forward to take up the offers. Zimplats last week signed an agreement with the government to cede some mining rights amounting to 36% of its resource base along the Great Dyke region.

In March, the Chamber of Mines representing 200 mining houses in Zimbabwe, warned the proposed amendments to the mining law would effectively kill off investment needed to keep the mines open.

The country’s biggest gold miner RioZim, which has also diversified into diamond mining, says it has put on hold a US$120-million expansion plan at the Murowa diamond mine until the proposed amendments are clear.

RioZim chief executive, Eric Kahari, told shareholders that the company would also scale down production at the mine, freeze expansion plans and start winding down from 2009.

Rusere also said the government had identified three international firms for the exploration of uranium, adding that the name of the successful firm would be announced soon.

Electricity-strapped Zimbabwe plans to reduce its monthly $6-million power import bill by resorting to nuclear power. — AFP.

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