31 May 2018

Zimbabwe: Relax 51/49 Requirement On Diamond, Platinum Mines, Urges Zimbabwe's Mining Chamber

Photo: The Herald
Finance and Economic Development Minister Mthuli Ncube (file photo).

Zimbabwe's mining chamber has asked the government to allow majority ownership by foreign investors in diamond and platinum mines, a move it says will unlock more investment for the capital intensive sector.

In March this year, the southern African country changed its empowerment law to limit majority ownership by state entities to only diamond and platinum mines and not the entire mining sector as in previous version of the legislation.

The Indigenisation and Economic Empowerment Act of 2008, which was designed under former president Robert Mugabe's administration to increase black Zimbabweans' share of the economy, was widely blamed for investor apathy in the country. It was also seen as opaque and open to abuse, to the detriment of foreign investor confidence.

Chamber of Mines president, Batirai Manhando, who appeared before the Parliamentary Portfolio Committee on Mines and Energy this week said that the two sectors were very capital intensive and would require around $5 billion investment.

"We do appreciate government's position to relax other minerals, but I think this should have been extended to all minerals, more so, if you look at platinum and diamonds which are very capital intensive minerals," Manhando said.

"We need more than $5 billion capital for their mining and beneficiation and these require foreign direct investment, and if we stick to the 51/49 threshold then we are restricting FDIs and investors will not bring in their money."

Zimbabwe has the second largest known platinum deposits after South Africa and the two largest producers in the world, Anglo American Platinum and Impala Platinum Holdings have operations in the country.

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