Friday, June 09, 2006

Zim will not back down on mining rules

imbabwe will not back down on proposed changes to its mining laws which will give the state a majority stake in foreign-owned firms, a minister said on Thursday.

"There is no going back on the 51% mining ownership structure policy structure for the government and 49% for outsiders," Junior Mines Minister Tinos Rusere told Agence France-Presse.

"There have been various submissions with some proposing a 30% stake for locals but there is no going back on what we have said."

"Very soon the actual [Mining and Minerals Amendment] Bill will be tabled in Parliament which will clarify everything," he added.

President Robert Mugabe last week sought to reassure mining firms in Zimbabwe over the proposals, saying they would not lead to property grabs.

Platinum mining giant Zimplats has met with Mugabe to try to persuade the government to reduce the proposed 51% stake for the state to 30%.

"Thirty percent being offered is out of the question," Rusere added.

Zimbabwe is in the throes of an economic crisis, with inflation topping 1 000% and severe shortages of fuel and food in the Southern African country.

A key pillar of the economy along with agriculture, the mining sector last year accounted for 44% of Zimbabwe's total foreign currency revenues, according to Reserve Bank figures. The sector employs close to 45 000 workers.
n March, the Chamber of Mines representing 200 mining houses in Zimbabwe, warned the proposed amendments to the mining law would effectively kill off investment needed to keep the mines open.

The country's biggest gold miner RioZim, which has also diversified into diamond mining says it has put on hold a $120-million expansion plan at the Murowa diamond mine until the proposed amendments are clear.

Riozim chief Eric Kahari told shareholders that the company would also scale down production at the mine, freeze expansion plans and start winding down from 2009.

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