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Zimbabwe Is Willing to Negotiate Mining Royalties, Minister Says

Feb. 28 (Bloomberg) -- Zimbabwe’s government is willing to negotiate royalties with mining companies, Finance Minister Patrick Chinamasa said after the government proposed channeling a quarter of the levies into a planned sovereign wealth fund.

“We are aware that we shouldn’t kill the goose that lays the golden egg, but equally the goose mustn’t take the entire egg,” Chinamasa told a mining conference in the resort town of Victoria Falls today.

The planned wealth fund would receive royalties from gold, diamond, platinum and other mining operations under a bill outlined by the government in November. President Robert Mugabe, who extended his 33-year rule in July, is seeking to expand the country’s economy, which shrank by 40 percent from 2000 to 2008.

Mining companies “should sit down and talk” with the government about royalties and taxes, the finance minister said. “The lower the taxes, the better it is for the industry, but we want to ensure we are benefiting from these depleting assets.”

The country has the world’s largest known reserves of platinum and chrome after neighboring South Africa. The nation also digs for diamonds, nickel, gold and coal. Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and South Africa’s Metallon Corp. are among foreign miners operating in Zimbabwe.

To contact the reporter on this story: Brian Latham in Harare at blatham@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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