Home » Education » ZIMBABWE GOVT URGED TO SCRAP INDIGENIZATION LAW REQUIREMENTS FOR DIAMOND INDUSTRY

HARARE-- The Zimbabwe government has been urged to scrap the indigenization requirement for investments made in the diamond mining industry as its continued application may make it

difficult for players in the sector to attract capital.

The Zimbabwe government recently adjusted the indigenization law, making it only applicable to investments made in diamond and platinum mining. The decision was meant to attract improved foreign investment into the country, as investors shied away because of uncertainty over application of the law.

RioZim, which operates the Murowa diamond mine in Midlands province, has appealed to the government for favourable policies to attract investment as the industry is capital intensive.

We would require that this matter of indigenization be looked at and direction given so that as we engage financiers to capitalize our operations. We find that if it is left like this the diamond industry might be unattractive, the company says.

Government should give clarity on policies especially the one for indigenization as it could stand in our way in terms of our success to raise funds.

The company has also appealed for a reduction on royalties payable to the government, highlighting that Zimbabwe's charges did not compare favourably with neighbouring countries.

We recommend that a royalty in the region of five to seven per cent could be a good starting point as we support the mantra 'we are open for business'," the company says.

Diamond production at Murowa is on an upward trend since RioZim took over the mine from Rio Tinto in 2015.

The company produced 255,000 carats in 2015, while in 2016 production went up to 475,000 carats and it is targeting more than one million carats this year.

RioZim is a listed local independent mining company with interests in gold, diamonds and coal.

Source: NAM NEWS NETWORK

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