GOVERNMENT has withdrawn the Mines and Minerals Amendment Bill which demanded foreign owned mines to cede 51% of their shareholding to locals as it seeks to lure external investors.
Informed sources yesterday said government had withdrawn the Bill which was scaring away foreign investors in the mining sector and forced mining firms not to embark on long term plans.
â€œThe bill was withdrawn. With the current programme to revive the economy, it could not have come at a better time,â€ a government official said yesterday.
The bill among other investor unfriendly facets sought to transfer a majority stake to locals, including giving the Zimbabwe government a free 25% stake.
President Robert Mugabe had thrown the economic future of stressed Zimbabweans into greater uncertainty and confusion with a declaration that the state intended nationalising all 500 of the countryâ€™s mines.
Mugabe at the time said the bill â€œwould broaden participation in the sector by indigenous playersâ€.
The bill spooked mining firms and analysts warned it could backfire and hurt the mine sector, now the countryâ€™s leading foreign currency earner, worsening an economic crisis that has devastated Zimbabweâ€™s economy.
Foreign firms that would have been affected include the worldâ€™s second biggest platinum producer, Impala Platinum, which has widespread operations in Zimbabwe. Rio Tinto which has diamond interests and the worldâ€™s top platinum producer, Anglo Platinum,Â which is developing a mine in the country and Metallon Gold owned by South African tycoon Mzi Khumalo were to be affected.
Several mines in Zimbabwe have shut down in the past year, suffocated by hyper-inflation, shortages of skills, power outages foreign currency shortages and lack of investment.
Critics had previously warned that if empowerment was not handled carefully, the country could see a repeat of the â€œchaoticâ€ land reforms.
Mining has become a pillar of the countryâ€™s economy, following the collapse of commercial farming, with gold alone generating a third of all export revenue.