Robert Mugabe takes over Zimbabwe mines

HARARE – Zimbabwe will set up a sovereign wealth fund to own 51 percent stakes of mining companies, effectively nationalising half of the country's key resources sector, a government minister said on Wednesday.\r\n

Saviour Kasukuwere, Minister of Youth Empowerment and Indigenisation, said the government in the resource-rich country would publish guidelines on mine ownership regulations on Friday.

The move is likely to discourage foreign investment in the recovering economy and will hit foreign miners operating in Zimbabwe like AngloPlat and Implats, the largest and second largest platinum producers in the world and mining giant Rio Tinto, which runs a diamond mine in the country.

"In the mining sector specifically, we have been getting a raw deal all this time with companies taking money out of the country," Kasukuwere said.

Kasukuwere said earnings from mineral exports reached $1.7 billion in 2010, about 30 percent of the country’s estimated yearly GDP, but that mining companies had only paid $4 million in taxes to the government.

President Robert Mugabe has rattled investors with his government plans to force foreign-owned firms to sell at least 51 percent to local blacks.