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Zimbabwe Mining Report Q4 2010

635

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Electronic License

Electronic License

An electronic version (mostly PDF, but can be Excel or PPT), which is either available for immediate download or will be sent via email by the Publisher of the report. The licencing for an electronic version is for use by the purchaser ONLY.

£635.00

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Market

Agriculture, Farming & Raw Materials

Report Type

Market Research

Country

Zimbabwe

Published

21 October 2010

Number of Pages

64

Report Delivery

Download

Delivery Lead Time

Immediate

Publisher

Business Monitor International

File Format

-

The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.

Indigenous ownership levels under review Zimbabwes reputation on the global mining stage remains subject to its uncertain domestic politics and, in particular, continued calls by the government for Zimbabweans to hold majority stakes in mining projects. The Indigenization and Empowerment Act originally called for a 51% stake in all mining companies (with assets over US$500,000) to be divested to indigenous Zimbabwean groups within a fiveyear period. However, in June 2010, came news that the government would soften this stance, with Harare now looking to set varying empowerment stakes for different industrial sectors. In August 2010, so-called indigenisation committees were set up. These were given a September 30 2010 deadline to submit proposals for what level these percentage stakes should be set at, depending on the sector they are in charge of monitoring.

This latest development only adds to the growing sense of chaos around this issue within Zimbabwe. It comes as no surprise that many indigenisation committee members are allies of President Robert Mugabe, which raises fears over the transparency of the entire process. BMI will monitor developments on this topic as they occur. We reiterate our long-held view that there is a pressing need to negotiate with mining companies and resolve the issue of mining ownership once and for all, so foreign investors can work within a clear legal framework. The push to increase indigenous ownership of Zimbabwean assets was condemned earlier in 2010 by the countrys Chamber of Mines, with Mining Weekly reporting in May 2010 that the Chamber is petitioning the government to instead impose a variable level of indigenous ownership (from 15% up to 51%), arguing that companies that have invested in schools and roads should be subject to a lower indigenous ownership limit than 51%.

Even at present, the regulations provide for a level of indigenisation lower than 51% to be assigned to a foreign-owned company if there are socially and economically desirable objectives in favour of this lower level. Speaking in late May 2010, President Robert Mugabe said that the government would not expropriate any mines and that it was refining the local ownership law to reflect concerns expressed in the industry. He added that foreign direct investment (FDI) would be required to help the Zimbabwean mining industry grow. Country Overview The geology of Zimbabwe is very richly endowed with deposits of chrome, gold, nickel and platinum, among other minerals. The countrys gold reserves are among the largest in Africa, while it hosts the second-largest platinum reserves in the world. Another segment that has caught the attention of miners in Zimbabwe is diamonds, following the discovery of a number of significant kimberlites.

Zimbabwes mining sector has experienced a traumatic series of years over the past decade. However, there are reasons for guarded optimism as we enter 2010. Investment is returning to the sector, following the establishment of a national unity government. The 2009 liberalisation of the gold sector was a further positive. Consequently, we believe the scene is set for a period of strong growth for the Zimbabwean mining sector, although we would stress that this remains dependent on a continuation of the relative political stability that has endured in recent months. In this context, the developing furore over domestic ownership of mining assets could well become a more serious issue in the months ahead.

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Select License Type

Electronic License

Electronic License

An electronic version (mostly PDF, but can be Excel or PPT), which is either available for immediate download or will be sent via email by the Publisher of the report. The licencing for an electronic version is for use by the purchaser ONLY.

£635.00

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