Reserve Bank of Zimbabwe Governor Gideon Gono was quoted saying draft amendments which could allow the state to take a majority share in foreign-owned mines should respect private property rights, adding the proposed laws were a "hot issue" at a recent International Monetary Fund (IMF) board meeting.

The Mines Ministry has said cabinet approved amendments to the mining law "to indigenise 51 per cent in some instances of all foreign-owned companies", raising concerns on future foreign investment in a country facing foreign currency shortages.

"This issue took much of our time as we had to explain to the IMF executive board government's policy on the matter.

It was a hot issue," Gono said.

"For the ...

sustainable integration of Zimbabwe into the competitive global space for investment attraction, this process has to be done in accordance with strict observance and respect for private property rights, as well as through market-friendly principles of fair value exchanges," he told the newspaper.

"Without this, the country's investment landscape will forever be damaged, much to the detriment of the country's turnaround programme and its ideals."

The Mines Ministry's statement to the Chamber of Mines said the amended law would give the government 51 per cent in "energy minerals mining companies", including 25 per cent on a "non contributory basis," upon promulgation.

Industry officials say a non-contributory basis means the government would acquire shares without paying for them.

Gono said the government should distinguish between existing and future investments when pursuing its empowerment programme and that government and local investors should have sufficient financial resources to partner existing and future investors.

Gono has previously criticised government policies such as the seizures of white-owned farms to give to landless blacks, a policy which critics say has gutted the key agricultural sector and pushed the country into economic crisis.

But analysts say Gono has not enjoyed whole-hearted backing he was promised by Mugabe when he took up his post in 2003 with a mandate to pull Zimbabwe out of its economic slide.

The new draft mining law has sent tremors through the industry, one of the few in Zimbabwe that still has significant foreign involvement.

The world's largest second platinum producer Implats and Murowa diamond mine, 78 per cent controlled by Rio Tinto Plc, have expressed concern about the draft law.

- Nampa-Reuters

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