Zimbabwe will review mining contracts

Production and Markets

Publishing Date: 06 Jul 2009 12:07pm GMT
Author: Mining Journal

Zimbabwe will review all existing mining contracts and amend laws to compel miners to "use or lose" their mineral rights, Finance Minister Tendai Biti said.

"The World Bank is insisting that we comply with certain standards regarding mining industries," Biti said in a telephone interview from Harare. "New regulations regarding ownership won’t benefit just a few wealthy individuals, but will percolate down to the grassroots through a newly established National Sovereign Fund."

Biti wouldn’t say when the new law would be put before Zimbabwe’s parliament, stating only that previous attempts to limit foreign ownership "would be revisited."

Zimbabwe has the world’s second-largest platinum reserves after South Africa. The country also produces gold, nickel, ferrochrome and coal.

Biti said he is also in talks with the Johannesburg-based Development Bank of Southern Africa Ltd.

"They are in the country now and we’re negotiating an US$80 million loan to revamp Hwange," Biti said, referring to Zimbabwe’s main thermal power generator.

Hwange, which can generate about 95MW of power at full capacity, is currently "mainly off-line" as five of its six generators are closed because of coal shortages, Fullard Gwasira, a spokesman for the Zimbabwe Electricity Supply Authority, told the state-controlled Herald yesterday.

(Bloomberg, July 4)