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(NEWZIMBABWE) Mugabe promises stability to miners

Mugabe promises stability to miners
by
17/09/2009 00:00:00

PRESIDENT Robert Mugabe urged foreign mining companies to invest in the southern African country and sought on Wednesday to allay fears that such businesses could be expropriated.

Mugabe told a mining conference in Harare that the government would soon pass a new law to govern the sector, which would address concerns raised by an earlier draft. Under the previously proposed bill, foreign mining companies could not hold more than 49% of a business and had to sell any stake above that to Zimbabweans.

Following the collapse of commercial agriculture, mining has become the top foreign currency earner, with gold alone bringing in a third of total export earnings.

Mugabe, trying to woo badly needed foreign investment, said the law would seek a balance between attracting investors and empowerment of Zimbabweans.

“The review of the Mines and Minerals Act will seek to strengthen the relationship between the government and mining houses,” he said in a speech.

“It also seeks to ensure that Zimbabweans benefit from their natural resources through the creation of an enabling framework.”

Mugabe said the proposed law would be debated in the next session of parliament, which starts later this month. The mining conference is part of efforts by a new power-sharing government to attract investment.

Zimbabwe has the world’s second-biggest platinum reserves after South Africa and large deposits of diamonds, coal and nickel.

Mugabe said the sector needed foreign investors because it was capital intensive, and promised to implement stable polices.

“The government is committed to ensuring that the policy environment is stable, predictable and sufficiently attractive to guarantee investors good returns on their investment.” Some new cash was already trickling into the mining sector.

Elton Mangoma, Zimbabwe’s economic planning minister, said the country had approved 15 mining projects worth $400mn since February this year, and some were already being developed.

The country passed a nationalisation law in 2007, paving the way for the government to seize majority shareholding in mines, in some instances without paying a cent.

The legislation raised fears of a repeat of the violent seizures of white-owned commercial farms in 2000, which Mugabe defended as necessary to correct colonial land imbalances but which critics blame for food shortages.

Analysts say uncertainty over policies will probably continue to hold back big new mining investment.

Zimbabwe has had no meaningful exploration for the last decade while some foreign mining companies operating in the country have held back on expanding projects.

Labels: MINING, MUGABE

posted by MrK @ 5:13 PM