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Central Banker Appeals to Mugabe on Mines Takeover Proposal

Reserve Bank Governor Gideon Gono appealed personally Wednesday to President Robert Mugabe to shelve a plan to assume control of foreign owned mines, warning this would trigger the total collapse of the country’s already staggering economy.

Details of the meeting at Mr. Mugabe’s Munhumutapa offices remained sketchy, and Gono could not be reached for comment. But sources close to the discussion said the central bank chief's lobbying has run into stiff resistance within the cabinet.

Minister of Mines Amos Midzi has stated that the cabinet has already passed approval on the takeover legislation. Midzi announced the government's proposal to take a 51% stake in mining companies just as Gono and Finance Minister Herbert Murerwa were meeting the IMF Executive Board in Washington to ask that sanctions be lifted.

Gono says Midzi’s “untimely” announcement of the mine takeover plan eliminated any chance of obtaining a favorable decision from the IMF on recovering voting rights and renewed access to loans. Gono says any reform of the mining sector must be carried out in accordance with generally accepted notions as to property rights.

It has emerged, meanwhile, that Zimbabwe's platinum and diamond mines under the "indigenization" legislation would become quasi-state companies whose board and management would be appointed by the government, raising concerns that governance of such enterprises would give way to cronyism.

For perspective on the proposed nationalization of the key mining sector, reporter Blessing Zulu of VOA's Studio 7 for Zimbabwe turned to research chief Waalter Dewitt of Pan African Capital Holdings in Johannesburg, South Africa.

More reports from VOA's Studio 7 for Zimbabwe...