September 15, 2004

Government to demand 50 % shares in mines?

According to the state-owned newspaper, the Herald, President Robert Mugabe has announced that his government would soon lay claim to half-ownership of all the country's privately owned mines. Mugabe was quoted as saying: "We are going to demand that government be given 50% shares in the mines. We cannot recognise absolute ownership of our resources. That must be corrected." Furthermore, he was said of not suggesting any compensation for the equity. According to a senior government official, however, those statements were misquotes. Tinaye Chigudu, the permanent secretary of mines and mines development in Zimbabwe, told Mineweb that the newspaper was “twisting words to sell more copies. I have not known a situation where government policy is announced by one individual.” He furthermore stressed, that he had not got hold of the president’s office, but said he believed that Mugabe was talking about “idle land” and prospecting order rights. “These people own the rights to this land and are doing nothing on it,” he said, “It is something we have been talking about.” Although the ministry feels more ownership should be acquired on this land, he said no official ownership stake has been decided on yet. “We have sent a dummy bill to all the stakeholders in the industry, they have three weeks to reply with their proposals,” says Chigudu. Earlier this year, a draft bill was leaked to the public by which 49 percent ownership in the country’s mines could have to be transferred into the hands of Zimbabweans. According to Chigudu this bill was drafted by the previous secretary and was thrown out by parliament.
Zimbabwe has a wide range of mineral output and was a major world producer of gold, diamonds, platinum, chrome, asbestos and lithium. However, in the last four years production has plummeted. The country used to be the continent's third largest producer of gold, after SA and Ghana, but output has since dropped from 30 tons a year to 12 tons last year. Gold mining is, however, recovering thanks to a number of incentives introduced by Zimbabwe's central bank and is expected to produce an output of 22 tons this year. The incentives include an increase in the price of gold per kilogram, and the retention by mines of a certain portion of foreign currency earnings, which is badly needed for the importation of equipment and chemicals. (Business Day, Johannesburg / Newzimbabwe.com)

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