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11 Jul 2009 09:59
Zimbabwe will review laws forcing foreign companies to sell stakes in their businesses in a bid to make sure they do not discourage investment needed for mines and other industries, the mining minister said on Friday.
Under indigenisation laws, foreign companies cannot hold more than 49% of a business and must sell any stake above that to Zimbabweans. The government is also able to seize 25% of shares in some mines without paying.
The laws have led to the withholding of investment badly needed to raise production as Zimbabwe tries to recover from economic collapse under a unity government between President Robert Mugabe and old rival Morgan Tsvangirai.
Mines and Mining Development Minister Obert Mpofu told an investment conference the review would lead to legislation more focused on investment.
“Careful consideration will be taken to ensure that the process of indigenisation is not at the expense of the much needed direct foreign investment,” he said.
“We are back to the drawing board at stakeholder consultation stage where submissions of all the views of interested parties are now being sought again in order to address all the concerns,” he said.
Mining has become Zimbabwe’s leading source of foreign exchange, with gold accounting for a third of exports, but political turmoil, lack of energy and unfavourable regulation has forced some mines to close.
Zimbabwe has launched a review of all mining contracts, saying it would introduce a “use it or lose it” policy.
“In doing so we want to ensure that all those that are performing will not be prejudiced,” he said.
“We are doing it in a manner that will not frighten people away.” - Reuters
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