Chronicle Editor
Africa Moyo, Harare Bureau
MINES and Mining Development Minister Winston Chitando says Australian investors are keen to plough over US$500 million into the mining sector, with a number of them expected to visit the country next month to explore opportunities.
Minister Chitando was in Perth, Australia, last week for an investment roadshow organised by the Zimbabwe is Open for Business Forum.
He invited potential mining investors to take up investment opportunities in the country, particularly in mining assets that are operating below potential due to capital constraints.
Minister Chitando also explained that the previous drawback to investment, the Indigenisation and Economic Empowerment Act, has since been reviewed to allow investors to own 100 percent of their projects, apart from the platinum and diamond sectors.
“We do have mining assets which are operating but operating way below their potential because of lack of capital,” said Minister Chitando.
“What they require is to have the correct partners who can come in as joint venture partners or buy them out as the indigenisation requirement is no longer in place.”
Minister Chitando added that Zimbabwe is resource rich but is being let down by lack of funds mainly due to the impact of the Indigenisation and Economic Empowerment Act, in its previous form.
“Having the resource and having the human capital, why are we where we are? It is largely because of the lack of capital. Why have we lacked the inflows of capital? The reality is Zimbabwe was not open for business.
“And one of the major challenges over the years has been the indigenisation regulations whereby all foreign companies had to comply with the 51 percent local ownership (of companies) and that largely scared away capital such that when that law was put in place, there was very little investment in the sector,” he said.
The Second Republic amended the Indigenisation and Economic Empowerment in March last year to match its ‘Zimbabwe is Open for Business’ mantra, as it seeks to attract both local and foreign investors in a bid to revive the economy.
Foreign investors abandoned local investments citing concerns over the indigenisation regulations that stipulated a 51/49 percent shareholding structure in favour of locals.
This resulted in low foreign currency receipts for the country, and untold joblessness.
However, in his inauguration speech on November 24, 2017, President Mnangagwa declared that Zimbabwe was keen to attract more investors and abandon antagonism with the rest of the world.
This saw Government, through the 2018 Finance Act promulgated in March last year, amending the indigenisation regulations to allow foreign investors to own their investments 100 percent in all sectors of the economy apart from the diamond and platinum sectors.
Part of the Finance Act on amendment to the Indigenisation law reads; “Accordingly, any person is free to invest in, form, operate, and acquire the ownership or control of any business not included in Section 3 (1) or in the reserved sector of the economy”.
During the recent Chamber of Mines of Zimbabwe conference in Victoria Falls, immediate past president of the top mines body Mr Batirai Manhando said the mining sector’s medium to long-term prospects “are very bright” with output for most minerals expected to record “phenomenal growth”.
The growth is set to be driven by both Government and private sector efforts to resuscitate previously closed mines, exploration and development of new minerals and ramping up of capacity on existing mines.
Last year, the mining sector generated about US$3,4 billion out of the US$6,2 billion raked from exports, a development that underlines the sector’s centrality to economic turnaround.
The amendment of the Indigenisation Act has seen many foreign investors queuing to seek opportunities in the country, with a number of firms such as Sunny Yi Feng Zimbabwe – a tile making company in Norton – being permitted to operate.
The Chinese-owned company started producing tiles on May 12 this year and now employs over 1 000 people, which dovetails with Government’s desire to create decent jobs in line with “Vision 2030” of an Upper Middle Income economy.
Online Reporter