New Zim Bill Allows for 51% Takeover of Diamond Mines

He declared it, called for it, even threatened to do it, and now, he is creating the legal framework for carrying it out: Zimbabwe’s President Mugabe is passing a law that will allow the country to grab a 51 percent stake in mines operating in the country. Not just that, the law allows the state to not pay for 25 percent.

Zimbabwe’s Mines and Minerals Amendment Bill gives the government the power to takeover 51 percent of companies mining diamonds, other minerals and strategic fuels.

According to a report in the Times Online, the government is not required to pay for 25 percent of the company. The remaining 26 percent will be paid for from dividends. The government has seven years to pay for this stake, according to the bill.

Resistance is futile, as the bill sates that a company showing “willful noncompliance” in surrendering its shares will have its mining license revoked.

One property that could fall victim to this de-facto nationalizing effort is Rio Tinto’s Murowa diamond mine. The worst is projected to befall the country’s platinum industry.

Not all mining assets will go into the hands of the government. The bill reportedly allows for certain mineral mines to be taken over by indigenous Zimbabweans.

No doubt an extreme form of local beneficiation, another bill awaiting Mugabe’s signature is one that compels foreign companies to sell 51 percent of their shares to black Zimbabweans.