Monday, March 13, 2006

Mining laws might affect the economy

HARARE (Reuters) - Zimbabwe's central bank chief has warned President Robert Mugabe's government against draft mining laws that he said could hurt the country's economy, according to the state-owned Sunday Mail newspaper.

Reserve Bank of Zimbabwe Governor Gideon Gono was quoted saying draft amendments which could allow the state to take a majority share in foreign-owned mines should respect private property rights, adding the proposed laws were a "hot issue" at a recent International Monetary Fund (IMF) board meeting.

The Mines Ministry has said cabinet approved amendments to the mining law "to indigenise 51 percent in some instances of all foreign owned companies", raising concerns on future foreign investment in a country facing foreign currency shortages.

"This issue took much of our time as we had to explain to the IMF executive board government's policy on the matter. It was a hot issue," Gono said.

"For the ... sustainable integration of Zimbabwe into the competitive global space for investment attraction, this process has to be done in accordance with strict observance and respect for private property rights, as well as through market-friendly principles of fair value exchanges," he told the newspaper.

"Without this, the country's investment landscape will forever be damaged, much to the detriment of the country's turnaround programme and its ideals."

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