Zim wants half of gem investment

THE Zimbabwean government is demanding 50percent of all investments in the country's diamond wealth, local media reported.

THE Zimbabwean government is demanding 50percent of all investments in the country's diamond wealth, local media reported.

"With diamonds we want 50per- cent shareholding in joint ventures with investors. That's not negotiable," mines minister Obert Mpofu was quoted by the state-controlled Herald newspaper as telling a parliamentary committee on mining.

Mpofu said the government was drafting legislation to put its stake into law.

Zimbabwe has three diamond mines, one of which, the Chiadzwa diamond field in eastern Zimbabwe, is controlled by the state.

The military has been accused of gross human rights abuses against diamond diggers and residents in Chiadza. This prompted calls for Zimbabwe's suspension from the global diamond trade.

After visiting the area in June the Kimberley Process - a global watchdog that tries to prevent trade in diamonds that fuel conflict - called for the military to be withdrawn and for Zimbabwe's diamond sales to be halted for at least six months.

Mpofu yesterday again insisted that the troops would only be withdrawn once "adequate (private) security is in place".

He also told the committee that his government was planning on revoking all current privately held mining claims because they were "not doing any work" on the claims.

The government was drafting regulations "rescinding everything."

Future claim holders would have to prove that they were developing their claims, Mpofu said.

His remarks follow his assurances to investors at a conference earlier this year that the government was preparing an "investment-friendly" package for foreign mining companies.

Mpofu had hinted then that the government would scrap proposals for a 51percent government stake in investments.

Prime minister Morgan Tsvangirai had also said that the government would scale back its demands.

Industry executives have warned that a 50percent state stake could deter investors at a time when the cash-strapped government is desperate for revenue.

They blame the international recession and uncertainty over governments' plans for mining for the reduced activity at mining concessions. - Sapa

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