(NEWZIMBABWE) Zim shelves mines law change

Zim shelves mines law change
by
28/07/2009 00:00:00

ZIMBABWE has halted amendments to its mining laws that would have forced foreign companies to sell stakes in their businesses to locals.

Thankful Musukutwa, the Mines and Mining Development Permanent Secretary, said on Monday: “There has been realisation that, in its present form, the Bill would not be able to attract meaningful investment.”

Mines and Mining Development Minister Obert Mpofu told an investment conference earlier this month that the government would review the planned amendments to the mining law after an outcry from foreign companies.

The amendments would have forced foreign companies to not hold more than 49 percent of a business and forced them to sell any stake above that to Zimbabweans. The government was also going to be able to seize 25 percent of shares in some mines without paying.

The planned amendments have led to the withholding of investment badly needed to raise production as Zimbabwe tries to recover from economic collapse under a unity government between President Robert Mugabe and old rival Morgan Tsvangirai.

Prime Minister Tsvangirai had already assured investors the amendments would not go ahead.

And Mpofu told an investment conference this month that “the process of indigenisation should not be at the expense of the much needed direct foreign investment.”

Mining has become Zimbabwe's leading source of foreign exchange, with gold accounting for a third of exports, but political turmoil, lack of energy and unfavourable regulation has forced some mines to close.