The Zimbabwean government said Wednesday it was taking control of huge diamonds deposits, newly discovered in the east of the country, as part of a controversial economic empowerment drive.
Although not fully ascertained, the diamond deposits are so vast that experts say Zimbabwe will account for 25 percent of global supply when exploited.
In a statement, the government said it would control of the deposits, and acquire no less than 51 percent shareholding in all foreign-owned mining ventures in the country.
The country has enacted controversial indigenization and economic empowerment laws under which all foreign-owned businesses are being compelled to dispose majority shareholding to locals.
“The shareholding in the mining sector as it relates to the state shall be as follows: 100 percent for all alluvial diamonds; minimum 51 percent for other minerals, including non-alluvial diamonds,” Indigenization and Empowerment Minister, Saviour Kasukuwere, said.
He said the cabinet had also approved a proposal for local communities where mining projects are located to get 10 percent from gross profit.
He added that the state would also create a Sovereign Wealth Fund, ‘whose main objective is to house value deriving from the ownership requirements provided for in terms of the law.’
Critics of the law had argued it would drive away foreign investment which Zimbabwe desperately needs to anchor its economic recovery.
But President Robert Mugabe has insisted much of the profit from exploitation of natural resources such as minerals should be retained in the country.
Kasukuwere said the new shareholding limits would take effect as soon as Mugabe signed them into law, which was expected shortly