Chamber of Mines of Zimbabwe (COMZ) president, Batirai Manhando has urged the government to scrap off indigenisation requirements on diamond and platinum sectors, as failure to do so will chase away investment for the extraction of the two minerals.
By VENERANDA LANGA
Manhando said this when he appeared before the Parliamentary Portfolio Committee on Mines and Energy on Monday, wherein, he told parliamentarians that the diamond and platinum sectors were very capital intensive.
“We appreciate the government’s position to relax other minerals, but I think this should have been extended to all minerals, more so, if you look at platinum and diamonds, which are very capital intensive minerals,” he said.
“We need more than $5 billion capital for their mining and beneficiation and these require foreign direct investment, and if we stick to the 51/49 threshold we are restricting FDI (foreign direct investment) and investors will not bring in their money.”
Manhando said investors would be wary of investing where they do not hold the majority shareholding, and it was necessary to open up the two sectors.
He said if the government insisted on the 51/49 indigenisation threshold for the two minerals it would be detrimental to business, as locals cannot afford to raise capital for 51% ownership.
The government relaxed the indigenisation threshold for all minerals except platinum and diamonds.
Reserve Bank governor, John Mangudya, who was present at the meeting with parliamentary committee, agreed with COMZ.
“The Mines ministry is seized with the issue to ensure that, at the end of the day, the government comes up with a good policy.
“Anything that increases production in the country is needed,” he said.