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Finance Minister Patrick Chinamasa/AFP

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Zimbabwe mines must still cede majority shares: party official

Finance Minister Patrick Chinamasa/AFP

Finance Minister Patrick Chinamasa/AFP

HARARE, June 5- Mining companies in Zimbabwe will still have to cede a majority shareholding to local investors under planned changes to a controversial black empowerment law, a ruling party spokesman said on Thursday.

“It was agreed that where mining is concerned, the shares should be 51 percent to local investors and 49 percent to foreign investors,” ZANU PF spokesman Rugare Gumbo told AFP after a meeting of the party’s highest decision making body, the politburo.

“With respect to the manufacturing as well as financial services sectors, the position has to be negotiated between parties that are going into the joint venture.

“The (indigenisation) minister was tasked with putting the changes in legal format so that they become the law of the country,”he said.

The controversial 2007 indigenisation law ordered that all foreign firms hand a 51 percent shareholding to local partners.

Finance Minister Patrick Chinamasa told parliament last week that cabinet had decided that the law should be changed to make it clearer and more investor friendly.

In its original form, the law spooked investors faced by a weakening economy and high unemployment levels.

The indigenisation law has also been a source of conflict between Mugabe’s allies, with some maintaining a hardline stance while others opposed the measures.

Information Minister Jonathan Moyo earlier divulged some details of the planned changes to the indigenisation and empowerment policy.

One change would allow foreign investors to recover their initial capital investment, a return on investment and operational costs before sharing profits, said Moyo.

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Under the original law, foreign owners of mines in Zimbabwe were given an ultimatum to surrender more than 50 percent of their shares and find local partners or risk nationalisation.

Mugabe said that the law, which followed controversial land reforms, was meant to reverse imbalances which resulted from colonialism.

But critics including opposition leader Morgan Tsvangirai have been adamant that the law would enrich Mugabe’s allies and scare away foreign investors.

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