Zimbabwe: Chinese project faces mining hurdle

Zimbabwe: Chinese project faces mining hurdle
Published: 02 February 2015

Chinese plans to set up a cement-making factory in Zvishavane have run in to problems after it emerged that the mining rights in the area belong to Shabanie Mashaba Mines (SMM).

Top Zimbabwe government sources told the Zimbabwe Independent this week the project was supposed to be set up some 30km from the mineral-rich town of Zvishavane along the Zvishavane-Mbalabala road.
However, they [the Chinese investors] can only set up the factory when the issue of mining claims to the area held by SMM has been resolved," according to one source This may delay the project as SMM is still the subject of an ownership wrangle between government and South Africa-based businessman Mutumwa Mawere.

Mawere took control of the company in March 1996, before it was seized by the government in 2005 in terms of the Reconstruction of State Indebted Insolvent Companies Act of 2004 and placed under the judicial management of Afaras Gwaradzimba. The Zimbabwean businessman, now based in South Africa, has since filed a Constitutional Court application to regain control of the company.

The Zimbabwean government has been actively seeking foreign direct investment to shore up the economy. Where there have been memorandums of understandings and agreements particularly with China and Russia, implementation has been hindered by alleged bureaucratic red tape or concerns about poor corporate governance in the partnering state enterprises and parastatals.