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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (38470)	6/11/2009 8:12:21 PM
From: LoneClone	Read Replies (1) \| Respond to of 195465

Zambia moves to boost stake in foreign-owned mining firms miningweekly.com By: Jade Davenport 11th June 2009 CAPE TOWN (miningweekly.com) – The Zambian government on Wednesday confirmed its intention to increase its shareholding in foreign-owned copper mining companies by 25%. Zambian Mines and Minerals Development Minister Maxwell Mwale told delegates attending the 19th annual World Economic Forum on Africa that this move would increase state ownership of foreign-owned mines to 35%. However, Mwale was quick to allay fears that this was not a step towards nationalising the mining industry, stating that the government had no intention to nationalise the sector. "Only by taking 51% would it amount to nationalising the industry," he said in Cape Town. “We believe that the sector should be driven by the private sector.” Mwale explained that a 35% shareholding in foreign-owned copper mining firms would give the government a more powerful voice in companies’ boardrooms and would prevent mine closures. The Zambian economy is heavily dependent on the copper-mining industry. “A closure of any mine has serious consequences for the Zambian economy,” said Mwale. This move has been backed by the mining unions which had urged the government to take a bigger stake in mines in order to exert influence, prevent mine closures and save jobs. The government would target those mines that were closing, or likely to close down soon, first. However, no timeline was given as to when the government would implement the move to increase its shareholdings. The intention to increase government shareholding in foreign-owned mining companies comes against the backdrop of a failing world economy and a slump in metal prices. Between July and December last year, the copper price fell by 60%, which forced many marginal mines in Zambia to close down. It had been reported that a slump in the metal price and the closure of mines had resulted in a loss of 10 000 jobs in that country’s mining sector. However, on a more positive note, Mwale stated that there were signs that the copper sector was beginning to improve and show some resilience. He also said that it was essential to concentrate on the diversification of Zambia’s economy. Copper is a finite resource and the mining sector could not continue to extract the limited resource indefinitely, thus, the government was looking to grow the agriculture and tourism sectors to diversify the economy, Mwale told delegates.