Mar 20, 2018

Zimbabwe Government Changes Mining Law; Now Restrictions Only on Diamonds & Platinum

The Government of Zimbabwe under President Emmerson Mnangagwa has enacted changes to the law, introduced earlier by the erstwhile Robert Mugabe government, which limited majority ownership in mining companies to only state-owned entities. The restrictions have now been lifted, except with regard to the diamond and platinum sectors.

The Indigenisation and Economic Empowerment Act, promulgated by the Mugabe regime, sought to increase the stake of indigenous Zimbabweans, but has had a negative impact on  foreign investments in the mining sector, the current government believes.

Finance Minister Patrick Chinamasa had referred to the proposed amendments in December 2017, when he made the 2018 budget statement.

Now, a report from Reuters has confirmed that “Amendments were included in the Finance Act, which covers the 2018 budget and were signed into law by Mnangagwa on March 14”. 

Under the amended law, foreign investors can hold  majority stake in any other mining venture, except for diamonds and platinum where a state-owned entity must control the majority stake.

It was also reported by the media that existing businesses “do not need to immediately comply with the law as they can negotiate a timeline of compliance with the authorities”.

 Meanwhile, the Zimbabwe Mail, reporting  on the Parliamentary Portfolio Committee on Mines and Energy’s interaction with investors,  stated: “Parliament says it is not pleased over what it termed a ‘mafia like hostile takeover’ of diamond mining ventures from investors by government through the Ministry of Mines and the formation of Zimbabwe Consolidated Diamonds Company (ZCDC) which they say is illegal.”