Zimbabwe won't cancel mining licences

Harare - Zimbabwe had no intention of cancelling the mining licences of foreign companies and will continue talks with some miners over a law requiring them to give Zimbabweans a 51% stake in their local holdings, the mines minister said on Wednesday.

Companies like Zimplats, the local unit of South Africa's Impala Platinum Holdings [JSE:IMP], have been in talks with the government for months over the law which analysts have said was unworkable.

Mines Minister Obert Mpofu told a mining conference in Harare that the government did not intend to cancel any licences.

"We have no intention of cancelling any licences. There are some negotiations taking place with some parties. No licence has been cancelled. We have no such intention," he said.

The Zimbabwean government and Zimplats said on Tuesday they had agreed to produce a revised plan for a law requiring mining firms to turn over a 51% stake to local blacks.

Zimbabwe rejected Zimplat's initial share transfer plan. As a result, the empowerment minister asked the mining ministry to cancel the unit's operating licence, Zimplats said last week.

But on Tuesday the company and the government said it could produce a revised plan and had until November to do so.

Analysts see the Zimbabwe law as a way to squeeze more funds out of companies trying to build operations in the country with the world's second biggest platinum reserves after South Africa.

There is not enough money in the impoverished state to buy controlling stakes in foreign mining firms. Zimbabwe neither has the money or expertise to run mines, where production will almost certainly dwindle under forced local ownership.