The mining industry in Zimbabwe could stop growing if the government presses ahead with forcing companies operating in the country to be majority owned by indigenous investors.

In an interview with Mining Weekly, Zimbabwe Chamber of Mines president Victor Gapare argued that the mining sector is central to the country's economic recovery and the government's policy threatens its viability.

Zimbabwe president Robert Mugabe is pressing for a law that will see mining companies hand over 51 per cent of their operations to indigenous Zimbabweans.

Although dwarfed by neighbouring South Africa, Zimbabwe is thought to have some of the richest reserves of platinum in the world.

"My view is that, if the indigenisation issue is not handled sensibly, we will see those investors already mining continuing to mine but with no new capital coming into the country," he said.

"Most of the projects, particularly in gold and base metals, will not meet the required hurdle rates for investment, which will result in sterilisation of a number of ore bodies."

Mr Gapare further noted that the mining sector needs an additional $5 billion (£3.1 billion) of investment to meet its potential.

He told the publication that this money will have to come from foreign sources as it simply does not exist in the local market.

Earlier this month, Anglo Platinum announced the opening of its new $600 million (£371.8 million) Unki Mine, which is expected to become Zimbabwe's second largest platinum producer.

Source:


Indigenisation will have dire consequences for mining sector if it is not handled ‘sensibly’ – Zim Chamber of Mines (15/04/11)

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