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(NEWZIMBABWE, REUTERS) Indigenisation: govt throws out 175 proposals

Indigenisation: govt throws out 175 proposals
Upping the stakes ... Saviour Kasukuwere and Arthur Mutambara
20/07/2011 00:00:00
by Reuters

THE government has rejected all 175 local ownership proposals it received from foreign mining companies, and will kick out any firms that don't meet a September deadline on majority black ownership, the empowerment minister said on Wednesday. Under the controversial law, foreign miners operating in Zimbabwe must sell a majority stake to local black investors or face losing their assets.

"We have received 175 proposals from mining companies and we've turned down all of them. The proposals were that 26 percent would be done through social credits and 25 percent direct equity," Saviour Kasukuwere, the minister for indigenisation and economic empowerment told a conferene in Harare.

The government estimates the mining sector will need $6 billion over five years but has struggled to attract investors, who are put off by the uncertain investment climate and unclear legislation.

Social credits relate to points awarded to firms for investing in infrastructure and development projects such as roads, schools and hospitals.

Kasukuwere's comments could be a sign the government is unwilling to settle for anything less than majority direct ownership by locals.

"By the end of September, any mining company that doesn't comply with the law, we'll kick them out. We'll ask them to hand over their assets to government," he said.

Mineral-rich Zimbabwe has the world's largest known platinum reserves after neighbouring South Africa. Foreign miners operating there include Zimplats Holdings, a unit of Impala Platinum , global mining giant Rio Tinto and Anglo Patinum .

It also has gold, diamonds, ferrochrome, coal and iron ore reserves but the mining sector is starved of capital after years of decline.

[After a decade of economic sanctions, like ZDERA. Reuters is owned by the same bankers who own global diamond monopolist Anglo-American De Beers. - MrK]

Kasukuwere has previously told Reuters that Zimbabwe's cash-strapped government would not pay any money for the mining stakes but would base any payment negotiations on the state's ownership of the country's untapped mineral wealth.

Labels: INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), SAVIOUR KASUKUWERE

posted by MrK @ 9:56 PM