Zimbabwe: Bill will kill mining, say analysts

source: The Financial Gazette
Rangarirai Mberi and Kumbirai Mafunda Staff Report

ZIMBABWE’S controversial draft law compelling foreign owned mining enterprises to cede 25 percent of their shares to the government will scare away existing and potential investors, mining executives and economic analysts said this week.

President Robert Mugabe’s government on Monday published a draft legislation that would require virtually all foreign-owned mining companies to transfer majority shareholdings to local owners as well as surrendering a 25 percent stake to the government at no cost.

But the Zimbabwe Chamber of Mines this week reacted angrily to the proposed draft bill warning the move would be disastrous to the ailing and delicate sector as it would drive away foreign direct investment into the capital intensive sector.
“We have made our position known clearly to the government. We don’t agree with the position they have taken. We want a situation that encourages production,” said Murehwa.

Murehwa, the chief operating officer at platinum miner Zimplats, which is controlled by South Africa’s Impala Platinum Mines, said the government’s move to force foreign enterprises to surrender half their shares to locals and to the government for free would kill off any new investment.
“It is unlikely that there will be new mines. Chances of new investors coming on [continue reading]

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