Maravi

(NEWZIMBABWE, REUTERS) Zim mining chamber proposes softer laws

Zim mining chamber proposes softer laws
by McDonald Dzirutwe
28/10/2009 00:00:00

ZIMBABWE'S Chamber of Mines has made proposals for the country’s mining bill that seek to strike a balance between attracting investors and indigenisation, to reassure foreign investors worried by talk of nationalisation.

An initial bill, which sought to force foreign mining firms to sell 51% shares to locals and gave 25% equity without paying in some companies, raised concerns among investors, but lapsed before it was passed.

That proposed bill led to the withholding of badly needed investment in Zimbabwe, which is struggling to recover from economic collapse under a unity government between President Robert Mugabe and old rival Morgan Tsvangirai.

Following the collapse of commercial agriculture [massively aided by Western economic sanctions such as ZDERA - MrK], mining has become the top foreign currency earner, with gold alone bringing in a third of total export earnings to a country that says it is unlikely to receive bilateral assistance soon.

As part of its proposals, seen by Reuters on Wednesday, the chamber of mines has asked the government to set mining firms a target of 25% local ownership within 10 years and use a scorecard system to measure empowerment levels in the sector.

The government will decide whether to include the proposals in a long-awaited mining amendment bill that is expected to be debated in parliament before the end of the year.

The mining chamber’s proposals, which have already been presented to the country’s mining ministry, require mining companies to set aside a minimum 10% equity for acquisition by locals within 10 years.

The chamber of mines said social and infrastructure spending, assistance to small-scale miners and release of mineral rights to government by miners would all contribute to the empowerment scorecard.

The chamber also proposes that miners be compelled to attain an empowerment score of 7% after three years, 18% after six years and 25% after 10 years.

“The empowerment score shall comprise the direct and indirect Zimbabwean equity ownership in the company plus the equity equivalent of other qualifying empowerment benefits provided by the company,” the chamber of mines said.

The chamber’s proposals are in line with a similar drive in South Africa, which has adopted the black economic empowerment (BEE) to include blacks in the mainstream economy after years of exclusion under apartheid.

South Africa, the biggest producer of precious metals, adopted BEE legislation four years ago compelling mining companies to sell 15% of their assets to black investors by 2009 and 26% by 2014.

Some of the key players in Zimbabwe include Impala Platinum Holdings (Implats), the world’s second largest producer of the metal, which has the biggest mining investments in Zimbabwe. Its bigger rival Anglo Platinum and Rio Tinto also have mining interests in the country.

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

Labels: BEE, CHAMBER OF MINES, CORRUPTION, NATIONALISATION, NEOCOLONIALISM

posted by MrK @ 7:43 PM