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Harare Hints at Compromise on Mine Nationalization Plan

The Zimbabwean government has hinted it may compromise on a plan to take a 51% "indigenous" stake in mining operations in the country, settling for a 15% share, this in the face of vocal resistance from local mine operators, pressure from South African holding companies, and reasoned opposition by its own central bank governor.

The reports of a lesser government stake came as Harare felt intense pressure from South African exchange-traded holding companies which stand to lose many millions should Harare proceed with its original proposal to take an immediate 25% stake in mining enterprises as of right, and eventually purchase another 26% stake.

However, one senior finance ministry official, speaking on condition of anonymity, said the fight was not over with tension running high in the cabinet, divided into camps led by Reserve Bank Governor Gideon Gono and Minister of Mines Amos Midzi.

Gono has been urging President Mugabe to shelve the indigenization proposal as it could deal a death blow to the already staggering Zimbabwean economy.

Chamber of Mines President Jack Murehwa – an executive of Zimplats, a platinum-mining operation controlled by South Africa's Impala - said talks continued and miners awaited word from Midzi. Chamber of Mines CEO David Muringai said his group has proposed alternatives for government-led black empowerment in mining which are similar to the schemes that have been implemented in South Africa.

Reserve Bank figures show mining production last year was worth US$626 million, and the sector brought in some 44% of the country's foreign exchange earnings.

For a market perspective on the possibility of a mines policy shift in Harare, reporter Blessing Zulu of VOA's Studio 7 for Zimbabwe spoke with Iraj Abedian, chief executive officer of Johannesburg, South Africa, based Pan African Advisory Services.

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