Zimbabwe Aims to Attract $16 Billion to Mine Industry

platinum_miningZimbabwe plans to implement rational mining royalties and taxes and to deregulate mineral marketing to attract as much as $16 billion in investment by 2018, Prime Minister Morgan Tsvangirai said. (pictured: platinum mining)

Zimbabwe will review its Mines and Minerals Act by the end of the year and aim to conclude investment guarantees with other countries, Tsvangirai said in an e-mailed copy of a speech made today to a mining conference in the capital, Harare. The government is trying to help the country recover from a decade- long recession that ended this year.

Zimbabwes mining sector presents the most immediate opportunity to attract significant investment, said Tsvangirai, who once worked at an Anglo American Plc nickel mine. This government, in conjunction with the mining industry, has a window of opportunity to prepare a conducive policy environment by mid-2010.

Companies have been deterred from investing in Zimbabwe, which has the worlds second-biggest platinum and chrome reserves, due to the economic collapse, political instability, threats of nationalization and a planned law to compel foreign mining companies to sell 51 percent of their assets to black Zimbabweans.

In February, President Robert Mugabe and Tsvangirai, the former opposition leader, set up a coalition government after intervention by the Southern African Development Community of neighboring states to end a 10-year political crisis.

Production Slump

Production of gold and coal slumped during the recession and Zimbabwes manufacturing and agricultural industries collapsed. Export earnings tumbled as white-owned commercial farms were seized and handed over to black farmers.

The state-owned Zimbabwe Mining Development Corp. currently oversees the sale of most minerals and metals. In February the government allowed gold miners to sell their metal directly rather than to the central bank at a set price.

Currently diamond miners are charged a royalty of 10 percent of sales while gold miners pay 3 percent and coal producers 1 percent.

Zimbabwe will aim to approve mine licenses within six months, Mines Minister Obert Mpofu told the conference earlier today. Some companies have been waiting for approvals since 2003, he said.

International Norms

The government will also ensure that any law to increase ownership of mines by Zimbabweans is in line with international norms, Tsvangirai said.

No right-thinking Zimbabwean, or any person from anywhere in the world, can see fault in such an approach if it is implemented fairly, he said.

Efforts will also be made to ensure that communities benefit from mines on their land, he said.

Zimbabwean security forces last year killed more than 200 people after tens of thousands swarmed onto the Marange diamond field in the Chiadzwa area to illegally mine for gems, New York- based Human Rights Watch said in June. The government has denied the accusation.

The tragedies that took place in Chiadzwa and other places cannot be repeated, Tsvangirai said.


Post published in: Economy

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