Zimbabwe to Claim 51% of All Minerals

Source:

"Many companies will likely have their licenses withdrawn."

Zimbabwe is nationalizing all alluvial diamonds and will claim a 51% share of all other minerals including gold, platinum and non-alluvial diamonds, a minister said on Wednesday.

At least 10% of the profits from any mining activity would be retained by the local community under new proposals agreed by the cabinet on Tuesday, Indigenization and Empowerment Minister Saviour Kasukuwere said.

The move means that the government could soon cancel mining contracts issued to foreign companies in the mining of alluvial diamonds [diamonds that have been removed from the primary source by natural erosive action and deposited in a new environment], mainly in Manicaland Province.

The measures would have far reaching consequences for the mining industry, already reeling from new empowerment laws which compel foreign-owned firms to sell at least 51% of their shares to locals.

Kasukuwere told reporters: "The government has decided on a Sovereign Wealth Fund whose main objective is to house value deriving from the ownership requirements provided for in terms of the law.

"Recognizing that our communities have not been benefiting from the exploitation of natural resources which they host, the cabinet has resolved that through a Community Share Ownership Scheme already provided for in the law, communities shall be entitled to 10% of gross profitó that is 10% of profit before tax."

Several companies, mainly South African, which were mining alluvial diamonds in Marange district would likely have their licenses withdrawn.

"This is the position of the government and those companies (in Marange) will be sitting down with us to discuss. The broad principle that has been set up by the government is that the alluvial diamonds belong to the State and they must benefit the people of Zimbabwe."

Kasukuwere gave no indication when the new regulations would be published.

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