Tougher Indigenization Regulations for Zimbabwe Mining Sector Forthcoming
The Indigenization Ministry has rejected proposals by mining concerns to increase investment in communities instead of divesting shares
Sources familiar with the new regulations said they will stipulate that all mineral development enterprises must be 51 percent owned by indigenous - i.e. black - Zimbabweans - while alluvial diamond deposits must be entirely controlled by such indigenous investors The government of Zimbabwe will soon publish new indigenization regulations proposing to oblige foreign-owned mining concerns to sell a majority stake to indigenous investors and disallowing so-called empowerment credits for grants to local communities. Sources familiar with the new regulations said they will stipulate alll mineral development enterprises must be 51 percent owned by indigenous - i.e. black - Zimbabweans - while alluvial diamond deposits must be entirely controlled by such investors. The alluvial diamond reference appears to bear on the massive Marange diamond field. The sources said the Ministry of Indigenization has already rejected proposals by mining concerns to increase investment in local communities instead of selling majority stakes in their operations in the country to indigenous persons or companies. Indigenization Minister Saviour Kasukuwere could not be reached for comment. The Zimbabwe Chamber of Mines said it is in the process of consulting the government about the latest set of indigenization regulations, hoping to come up with better ways to implement indigenization in the economically critical mining sector. Affirmative Action Group President Supa Mandiwanzira said his organization supports the move to force mining companies to sell a 51 percent share stake to locals. “The government should simply gazette fresh indigenization regulations in the mining and other key sectors forcing these companies to cede shares to indigenous people instead of asking locals to buy shares,” said Mandiwanzira. He argued that it is unfair to ask Zimbabweans to buy shares to control assets historically seized by outsiders. Economic commentator Bekithemba Mhlanga said the ZANU-PF party of President Robert Mugabe in the current pre-electoral environment is eager to pursue radical indigenization that will devastate the still-fragile national economy.