Harare, Zimbabwe — MININGREVIEW.COM — 17 September 2009 – President Robert Mugabe of Zimbabwe has urged foreign mining companies to invest in the southern African country, and has sought to allay fears that such businesses could be expropriated.
Mugabe told a mining conference here that the government would soon pass a new law to govern the sector, which would address concerns raised by an earlier draft. Under the previously proposed bill, foreign mining companies could not hold more than 49% of a business, and had to sell any stake above that to Zimbabweans.
Following the collapse of commercial agriculture, mining has become Zimbabwe’s top foreign currency earner, with gold alone bringing in a third of total export earnings.
Trying to woo badly needed foreign investment, Mugabe said the law would seek a balance between attracting investors and empowerment of Zimbabweans. “The review of the Mines and Minerals Act will seek to strengthen the relationship between the government and mining houses,” he added in his speech. “It also seeks to ensure that Zimbabweans benefit from their natural resources through the creation of an enabling framework.”
Mugabe went on to say that the proposed law would be debated in the next session of parliament, which starts later this month.
He said the sector needed foreign investors because it was capital intensive, and he promised to implement stable polices. “The government is committed to ensuring that the policy environment is stable, predictable and sufficiently attractive to guarantee investors good returns on their investment,” he added.
Some new cash is already trickling into the mining sector. Economic planning minister Elton Mangoma said the country had approved 15 mining projects worth US$400 million (R3.2 billion) since February this year, and some were already being developed.
Reuters quotes analysts as saying that uncertainty over policies will probably continue to hold back big new mining investment in Zimbabwe for the moment.