Chamber warns of Zim mines shake up

Harare - Zimbabwe's mining chamber said tighter proposed state control over the sale of minerals would hit Anglo American Platinum [JSE:AMS] (Amplats) and Impala Platinum Holdings [JSE:IMP] (Implats), slow down foreign investment and stunt growth in the industry.

Zimbabwe's mines ministry in March produced a draft minerals policy, which seeks to increase state participation in exploration, mining and the selling of metals and minerals.

The mining chamber and other stakeholders will debate the policy on May 29 and their deliberations would heavily influence the form of a new mining law for the country.

Under the proposals gold and platinum would be sold through a state appointed "authorised dealer".

Other mineral sales would be via state-owned Minerals Marketing Corporation of Zimbabwe, which the mining chamber said would bring inefficiency and higher costs to the industry.

In a draft response by the Chamber of Mines seen by Reuters on Monday, mining companies said the proposed policy showed Zimbabwe was moving from market policies.

"This effectively crowds out private sector, brings down impetus for innovation and ultimately scares away investment," the document said.

A Chamber of Mines spokesperson could not immediately comment.

The proposals will affect an industry that has seen foreign-owned mines sell majority shares to black interests under President Robert Mugabe's black economic empowerment programme.

Part of the proposals will see the ministry of finance picking an approved dealer through which platinum and gold producers will sell the precious metals.

Implats and Amplats, which have operations in the country, as well as gold producers independently sell their output and report the transactions to the government.

The government would also consider regulating how much coal and iron that can be mined by companies as well as setting prices of these "strategic minerals" for the local market.

Parliament is dissolved on June 29 with general elections slated to take place soon after. The new mining proposals are likely to become law in the next five-year parliament.

Mining accounts for the highest export earnings in the country, which holds the second largest deposits of platinum after neighbouring South Africa.