Zimbabwe rethinks mines law

ZIMBABWE'S inability to attract foreign investment has forced a re-think that includes the withdrawal of contentious amendments to a mining bill that would have halved private ownership.

For weeks prime minister Morgan Tsvangirai has been reassuring investors that planned legislation allowing government to take over 51percent ownership of foreign-owned mines would not go ahead.

The minerals that would have been affected include gold, diamonds and platinum.

Six months after the unity government was formed there has been little or no foreign investment into Zimbabwe.

Observers have blamed the country's unfriendly policies and pressure has been mounting for a re-think.

Zimbabwe has about 600 mines, many badly in need of massive capital investments.

Thankful Musukutwa, the permanent mines and mining development secretary, said: "There has been a realisation by government that in its present form the bill will not be able to attract meaningful investment."

The move to withdraw the contentious amendment comes ahead of other planned incentives, such as reduced import tariffs on capital goods.

President Robert Mugabe had mooted the bill as a means of appeasing a restless population during the country's economic meltdown.