Mugabe woos mining firms, promises stable policies

HARARE – The Head of State and Government and Commander-in-Chief of the Defence Forces, Zanu PF's first Secretary, and Zanu PF President, Patron of War Veterans body, UZ Chancellor, the President of Zimbabwe Robert Mugabe has opened a mining conference.

Mugabe has called for partnerships between government and the private sector in reviving the country’s mining industry.

Officially opening the 2009 Zimbabwe Mining conference, Robert Mugabe invited the private sector to complement government efforts in the development of the mining sector.

Mugabe said mining plays a crucial role in the revival of the economy and urged mining houses to consider paying royalties to the communities in which they operate in order to empower them.

He called on regional and international partners to provide financial and technical support to mining ventures in the country.

He also called for adherence to strict occupational standards in mining.

He said mining has in recent years been constrained by a number of factors which include the illegal economic sanctions imposed on the country by some western countries.

Mugabe called for the removal of the illegal sanctions saying they serve no purpose but to harm ordinary citizens.

"Mining has in recent years been constrained by a number of factors which include sanctions. These sanctions are serving no purpose but harm the ordinary person," noted the Mugabe.

He said the inclusive government has come up with measures and programmes to create a conducive environment for mining.

Mugabe said Short Term Economic Recovery Programme, STERP, was developed and adopted by the government as a blueprint for economic recovery.

He said Zimbabwe is endowed with a good climate and diversified mineral base awaiting exploitation.

The Mining Indaba seeks to explore investment opportunities in the sector and ways to set it on a path to support the country’s economic recovery among other things.

About 200 foreign investors are attending the two day mining indaba which is running under the theme ‘Reviving Zimbabwe’s mining sector, a clear way forward’.

Robert Mugabe urged foreign mining companies to invest in the southern African country and sought on Wednesday to allay fears that such businesses could be expropriated.

Mugabe told a mining conference in Harare that the government would soon pass a new law to govern the sector, which would address concerns raised by an earlier draft.

Under the previously proposed bill, foreign mining companies could not hold more than 49 percent of a business and had to sell any stake above that to Zimbabweans.

Following the collapse of commercial agriculture, mining has become the top foreign currency earner, with gold alone bringing in a third of total export earnings.

Mugabe, trying to woo badly needed foreign investment, said the law would seek a balance between attracting investors and empowerment of Zimbabweans.

"The review of the Mines and Minerals Act will seek to strengthen the relationship between the government and mining houses," he said in a speech.

"It also seeks to ensure that Zimbabweans benefit from their natural resources through the creation of an enabling framework."

Mugabe said the proposed law would be debated in the next session of parliament, which starts later this month.

The mining conference is part of efforts by a new power-sharing government to attract investment.

Zimbabwe has the world’s second-biggest platinum reserves after South Africa and large deposits of diamonds, coal and nickel.

Mugabe said the sector needed foreign investors because it was capital intensive, and promised to implement stable polices.

"The government is committed to ensuring that the policy environment is stable, predictable and sufficiently attractive to guarantee investors good returns on their investment."

FRESH CASH TRICKLES IN

Some new cash was already trickling into the mining sector.

Elton Mangoma, Zimbabwe’s economic planning minister, said the country had approved 15 mining projects worth $400 million since February this year, and some were already being developed.

The country passed a nationalisation law in 2007, paving the way for the government to seize majority shareholding in mines, in some instances without paying a cent.

The legislation raised fears of a repeat of the often violent seizures of white-owned commercial farms in 2000, which Mugabe defended as necessary to correct colonial land imbalances but which critics blame for acute food shortages.

Analysts say uncertainty over policies will probably continue to hold back big new mining investment.

Zimbabwe has had no meaningful exploration for the last decade while some foreign mining companies operating in the country have held back on expanding projects.