Zim sees $16bn mining investment by 2018

Reuters | Thu, 17 Sep 2009 15:09
[miningmx.com] -- Zimbabwe's minerals sector could attract investments of up to $16 billion once a more conducive business environment is in place, Prime Minister Morgan Tsvangirai said on Thursday.

That could help boost gross domestic product by $3 billion per year, Tsvangirai said.

Zimbabwe's new power-sharing government is keen to attract foreign mining companies to invest into a sector shunned by due to fears that businesses could be expropriated.

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

"This government, in conjunction with the mining industry, has a window of opportunity to prepare a conducive policy environment by mid 2010," Tsvangirai told a mining conference in Harare.

"That could see Zimbabwe's mineral sector attracting between $6 billion and $16 billion in exploration and mine development investment during the 2011-2018 period," he said.

Analysts say uncertainty over policies will likely hold back big new mining investments for years.

Tsvangirai said Zimbabwe will seek a competitive tax regime for investors, a rational royalty schedule, deregulate the marketing of minerals and by year-end conclude the implementation and policing of its Mines and Minerals Act.

Bi- and multilateral investment guarantees to secure repatriation of profits and dividends were also needed to ensure a proper investment environment was put in place, he said.

"The introduction of a multi-currency financial policy within Zimbabwe has provided much needed stability such that investors and Zimbabweans alike can plan and operate with confidence and this policy will remain for the foreseeable future," Tsvangirai said.

The prime minister stressed that a fair and realistic indigenisation framework needed to be established.

Zimbabwe has tried to calm fears that mines could be expropriated. 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 policy of indigenization... will be based on ensuring that ordinary Zimbabweans benefit from the country's mineral endowment and participate at all levels in the business of mining and mineral exploitation," he said.

Big mining companies in Zimbabwe include Anglo American Plc's unit Anglo Platinum, Impala Platinum and Rio Tinto, a major shareholder in a diamond mine.