HomeBusiness DigestMines suspend long-term projects

Mines suspend long-term projects

Paul Nyakazeya

MOST mining companies have stopped their long-term projects because they are still unclear about the fate of the Mines and Minerals Amendment Bill which p

roposes drastic changes to the ownership structure in the mining sector.

The Bill, which proposes to allow government to take over 51% shareholding in foreign owned mines could not be finalised because parliament had to adjourn in preparation for the March 29 elections.

Parliament will be dissolved on March 28. This means that there will be no progress on the Bill until a new parliament comes in on April 8.

Under parliamentary regulations and procedures, the Bill which was tabled in parliament in December falls away and can only be passed to the next parliament if the new government supports the idea.

If the new government supports idea, the Bill will have to be re-introduced to parliament. Any changes to the Bill will go through the drafting committee.

The Bill will also have to go through the senate.

Analysts said this further heightens the uncertainty in the mining sector which is already facing foreign currency shortages and power outages.

This means that foreign investors would have to wait until around May to make an informed decision about investing in Zimbabwe’s mining sector.

The few companies that were expanding have also stopped long-term projects until they are clear about the fate of the bill.

Chamber of Mines president, Jack Murehwa, said even though the Bill was not passed, its mere presence will continue to affect the mining sector. He said mines were unable to plan unless they are clear about the fate of the Bill.

“For as long as the revision of mining laws is not completed, investment will most likely stay away from Zimbabwe,” Murehwa said.

“Investors want to know the rules of the game before they risk their money. Investors are just like you and me. Would you invest a large sum of money in an environment where you do not know the rules of the game?”

“Of note was the added section on empowerment and the approach adopted on this section plus the fact that there seems to be no conclusion to the revision project which has been going on now for up to five years,” Murehwa said.

The first section of the Bill revises the mining laws that have been in existence for the past 30 years.

“This attempt is commendable and while there are sections that we feel could have been approached differently, in general this section has been well done,” Murehwa said.

The second section deals with the indeginisation of the mining industry.

“It is our view that the authors and sponsors of this section are not concerned about the views of both internal and foreign investors. We can confirm, however, that the contents of that section will certainly leave potential investors uninterested in Zimbabwe.”

“Certainly, if our suggestions were to be considered and adopted, we believe this would go a long way in building confidence in investors in the country and potential investors from outside the country,” Murehwa said.

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