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Divisions Over Zimbabwe's Indigenization Law Deepen

Serious policy divisions on Zimbabwe’s black economic empowerment policy are threatening to rock the rickety government of national unity as a crucial three-day mining indaba kicked off Wednesday in the capital, Harare.

The Movement for Democratic Change (MDC) formation of Prime Minister Morgan Tsvangirai and President Robert Mugabe's Zanu PF are headed for yet another showdown over the empowerment policy as it emerges that the country is failing to attract major investors especially in the mining sector.

Indications are that the mining sector needs up to US$7 billion to be fully operational.

The MDC has proposed in cabinet that the stringent empowerment policy requiring foreign firms to transfer 51 percent stakes to blacks be relaxed for first time investors in critical sectors such as mining.

Investors have been reluctant to do business with Harare citing policy uncertainties and skepticism over implementation of the indigenization and empowerment law.

But hardliners in Zanu PF are resisting the move though some moderates are backing it.

The fourth edition of the Zimbabwe mining indaba is aimed at boosting foreign direct investment in the mining sector.

Zimbabwe is showcasing minerals such as platinum, gold, diamonds, coal, nickel, chrome, emeralds and granite among others.

Mines Minister Obert Mpofu said there are many incentives being used to attract investors.

Deputy Mines Minister Gift Chimanikire of the MDC formation led by Mr. Tsvangirai said relaxing the 51 percent stakes for blacks in the empowerment law is the only option for attracting foreign direct investment.

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