Foreign mining firms in Zimbabwe may be allowed to retain their majority shareholding as a reward for their contribution to the development of local communities under amendments to proposed new legislation.
The government announced in March plans for a law to compel foreign firms to hand over 51% of their equity to local investors, sparking warnings from the mining sector that this would frighten away investment.
Now, according to proposals obtained by Agence France-Presse, the government is to amend the draft law to give companies credits for ”any investment into social investments such as schools, scholarships, training and on-going running costs of clinics”.
Companies that fare highly in the ”empowerment scorecard” will be required to shed a smaller stake to local investors, which the government says has been historically disadvantaged by laws that favoured huge conglomerates.
The chamber of mines, which has been leading the campaign against the initial proposals, said it was heartened by the latest developments.
”Both the ministry and ourselves are keen to resolve the issue of empowerment as soon as we can,” said the chamber’s president, Jack Murehwa.
”The current thrust of discussion is therefore most welcome. However we are not yet at a point where we can release a common position.”
In June, President Robert Mugabe sought to reassure foreign mining firms over proposals to give the state a larger ownership share, saying they would not lead to property grabs.
”We are not there to frighten away investors. We are not there even to take away that which is not ours. No. We are there purely to become partners in Zimbabwe,” said Mugabe during a visit to a platinum mine in Ngezi.
Around 200 foreign firms operate mines in Zimbabwe, which has significant reserves of platinum, diamonds and gold.
The Southern African country is in the throes of an economic crisis, characterised by four digit inflation figures and severe shortages of fuel and food.
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. – Sapa-AFP