Demystifying Zimbabwe's Mining Sector Indigenisation Legislation: A focus on the 51/49 principle (part 1)

The Zimbabwean mining sector has much potential for transforming its economy and livelihoods of its citizens. However, those with vested interests have always found a way to demonise any and everything coming out of the country to further their own selfish interests. This piece seeks to present an alternative view on the extant mining sector policy domain.

The concept of indigenisation has been a topical one, more so in the case of Zimbabwe where a law now provides for  limitations of foreign ownership across the various sectors of the economy. While many people choose to argue that indigenisation is not a feasible economic policy for Zimbabwe, others are simply "biting the bullet" and diving in head long and investing large sums of money into the Zimbabwean mining sector with huge attendant benefits.

The unique case of Chinese companies is a case in point here. Several Chinese companies have invested varying sums of money in both the agricultural and mining industry in Zimbabwe. Some have also invested heavily in the energy sector, the case of the multi-million  Kariba South Hydro-Electric Power Station expansion quickly comes to mind here. However, the most interesting investment have been in the mining sector where large returns can be made within a period varying between 2-5 years.

Diamond mining in the Marange (Chiyadzwa) Area has brought so many benefits, so that even various institutional investors from China and the government have sought to invest profitably.  

These investments have not only been in the precious minerals sector alone, as other companies are also now making inroads into the metallurgical sector with numerous prospectors eyeing the lucrative precious metals industry. Zimbabwe is gold and platinum mining country with the country having the worlds second largest reserves of platinum, after South Africa. Gold on the other hand has been mined from Zimbabwe since time immemorial, even before European colonialists arrived. In fact, gold was among the largest export and trade minerals of choice during the times of the Munhumutapa Empire, responsible for trade with merchants from far off continents and countries in Asia, Europe and the Middle East.

The Chinese investors also have invested in the chrome mining sector. Zimbabwe is a country of many greats as it has the worlds largest reserves of prime quality steel making chrome, potentially over 80%.

On the other hand, Russian investors have also begun making inroads with the only barrier being language as a gap still exists. With China, a Confucius has been setup at the country's largest institution of higher learning University of Zimbabwe. However, be that as it may, an initial US$3 billion injection into a new mine is testament to the confidence the Russians have in the potential of the Zimbabwean platinum mining industry.