Foreign mining companies to be forced to sell majority shares

A controversial Indigenisation and Economic Empowerment Act, requiring all businesses to give 51 percent of their shares to locals was signed into law in 2008, but the government has not yet acted on it. Economists and civic groups in the country have been very critical and described the move as just another ZANU PF ploy to loot successful businesses to enrich top officials and their cronies.

Kasukuwere said the regulations require 100 percent local ownership of alluvial diamond mines and other minerals must be 51 percent owned by Zimbabweans. New mining projects must also be 51 percent locally owned.

Economic analysts have insisted that foreign owned businesses in the country will shut down and potential investors scared off by such policies. They fear it will be the beginning of the end for foreign owned businesses in Zimbabwe.

People accept that there is a need for empowerment and for sharing wealth and resources. The problem in Zimbabwe is the issue of motive and a lack of strategic thinking, said economic and political analyst, Bekithemba Mhlanga. It is this haphazard , unclear thinking that will upset the international community and investors.

Mhlanga said it is unfortunate that Canadian mining firms are now taking their operations to Eritrea. Botswana and Mozambique have also gained from bad policies in Zimbabwe.

Meanwhile the economic planning and investment promotion Minister, Tapiwa Mashakada, told Reuters news agency that the China Development Bank is willing to invest up to US$10 billion in Zimbabwe, particularly in mining and agriculture.

China is looking into mining development, as well as agriculture, infrastructure development and information communication technology, said Mashakada, who was attending a business conference in Harare.

But China has been criticized globally for ignoring human rights abuses, in order to support its huge need for natural resources. The Chinese have also protected Robert Mugabe by voting against punitive action at the United Nations Security Council.

Analyst Mhlanga said the Chinese companies come into Zimbabwe with an air of superiority and do not abide by local rules and regulations. In terms of our own moral platform we must ask where do we stand with China, asked Mhlanga. He believes we must set clear rules and regulations for China regarding minimum wages, health and work conditions.

He said the Chinese have not made any significant contributions to the economy in Zimbabwe. They start off selling cheap zhing zhong products to flea markets and move on to tuck shops. The only major investment they ever made was the national sports stadium, and that is falling apart, said Mhlanga.

According to the Reserve Bank of Zimbabwe, mining output grew by 47 percent in 2010 and is expected to grow by at least 44 percent in 2011. But with policies requiring ownership by locals appointed by ZANU PF, the wealth from Zimbabwes minerals will do nothing more than benefit those who are already rich.