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(NEWZIMBABWE) Indigenisation to hurt mining growth: Gapare

COMMENT - The Chamber of Mines merely represents the mining corporations. Their interest is not at all the same as the interests of the Zimbabwean economy, or the Zimbabwean people. They would LOVE to see unrestricted growth if all the profits go to them, but that is not in the interest of Zimbabwe, the economy or the people. This is what happens in Zambia, where foreign mining companies alienate $2.5 billion a year from the economy as profits that go untaxed and unpaid out as divididends. That is their ideal situation. They will also lie, cheat and steal to make money. So don't take their word for anything, they are hostile to Zimbabwean interests.

Indigenisation to hurt mining growth: Gapare
by Business Reporter
16/04/2011 00:00:00

ZIMBABWE’S mining industry could stop growing if the government presses ahead with plans to force companies operating in the country to be majority owned by indigenous investors, the Chamber of Mines has said.

The Chamber’s president Victor Gapare insists that the mining sector is central to the country's economic recovery and the government's policy threatens its viability. Zimbabwe is pressing for a law that will see mining companies hand over 51 per cent of their operations to indigenous Zimbabweans.

The country is thought to have some of the richest reserves of platinum in the world.

Earlier this month, Anglo Platinum announced the opening of its new $600 million Unki Mine, which is expected to become Zimbabwe's second largest platinum producer.

In addition platinum-mining major Zimplats, part of the Impala Platinum group, recently approved the Phase II expansion of its Zimbabwe operations. Cash was also generated in 2010 through diamond sales sanctioned by industry watchdog the Kimberley Process.

"My view is that, if the indigenisation issue is not handled sensibly, we will see those investors already mining continuing to mine but with no new capital coming into the country," Gapare said.

"Most of the projects, particularly in gold and base metals, will not meet the required hurdle rates for investment, which will result in sterilisation of a number of ore bodies."

Gapare further noted that the mining sector needs an additional $5 billion (£3.1 billion) of investment to meet its potential.

He said this money will have to come from foreign sources as it simply does not exist in the local market.

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), VICTOR GAPARE

posted by MrK @ 2:15 PM