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won't grab free stake in mining firms
& Guardian (SA)
February 07, 2008
mining Bill will not force firms to give a stake to the government
for free as previously feared, and will be debated by Parliament
after elections next month, a senior official said on Thursday.
of President Robert Mugabe, who is running for another five-year
term, published the Bill last November.
It was said to
contain a requirement that mining firms transfer a majority stake
to locals, including giving the Zimbabwe government a free 25% stake.
The Bill spooked
mining firms and analysts warned it could backfire and hurt the
mining sector, now the country's leading foreign-currency earner,
worsening an economic crisis that has devastated the Southern African
state's economy, leaving it with the highest inflation rate in the
They fear the
Minerals Amendment Bill could hurt foreign investment in a nation
that has the world's second-biggest platinum reserves.
Zimbabwe is grappling
with a severe economic crisis blamed on Mugabe's controversial policies,
such as the seizure of white-owned farms to resettle landless black
"The Bill will
be tabled in Parliament after the elections, after the new Parliament
sits," said a top official in Zimbabwe's Mines Ministry, who declined
to be identified.
is not going to grab the shareholding as people have been saying,
the government will pay fair value," the official, who said he had
seen the Bill, told Reuters.
that are listed, the government will pay a market value and for
those that are privately owned, the government will hire consultants
to verify the value."
About half of
Zimbabwe's mining firms are foreign owned.
The world's second
biggest platinum producer, Impala Platinum (Implats), is the foreign
mining firm with the most operations in Zimbabwe. Rio Tinto has
diamond interests and the world's top platinum producer, Anglo Platinum,
is developing a mine in the country.
The proposed mines
Bill follows the passing in September of a general Bill giving 51%
stakes in foreign-owned firms to Zimbabweans. That Bill did not
include a provision for a 25% government shareholding.
The official said
it was likely the government would "buy a 20% and not a 25% stake
in the mining firms".
He said the Bill
would take into account credits towards the 51% local-ownership
requirement for any mining firms that gave up some unused mining
claims and committed to social spending such as building roads,
power and other infrastructure.
Implats has already
said it has agreements in place that it expects will meet the requirements
of the general Bill that seeks to grant majority ownership to locals,
and that, in principle, it supports the aims of localisation. Implats
has withheld public comment on the new mining Bill.
official said the government would also only take a stake on investments
in excess of $100-million.
But under the
law, Zimbabwe's government could take control of strategic uranium,
coal and methane projects, he said.
"Zimbabwe is open
for business," the official said when asked if the new mines law
could hurt investment in the same way the land-seizure law undermined
the country's economy.
"There are many
companies that are prospecting and operating mines there. Many others
still want to come in."
Mugabe, the veteran
ruler, in power since independence from Britain in 1980, denies
mismanaging the economy, blaming sabotage by Western nations plotting
to undermine his rule. – Reuters
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