Zimbabwe to re-evaluate all mining contracts

By Nelson Banya

HARARE (Reuters) - Zimbabwe will re-evaluate all mining contracts and introduce a "use it or lose it" policy for its mining industry under a proposed law, Finance Minister Tendai Biti told Reuters on Friday.

The vetting of mining contracts by Zimbabwe's unity government of President Robert Mugabe and Prime Minister Morgan Tsvangirai is likely to surprise investors at a time Harare is wooing them to help repair a battered economy.

Mining has become the leading source of foreign exchange, with gold accounting for a third of exports, but political turmoil, lack of energy and unfavourable regulatory rules has led to several mines closing.

"The government... is working on a new mining law, amendments to the mining laws, so that we comply with new standards for the extractive industries, which the World Bank is insisting on," Biti said in an interview.

"That law will introduce the concept of 'use it or lose it' with respect to... mining claims. It will also introduce the re-evaluation of every mining contract that has been signed in Zimbabwe."

Biti declined to say when the proposed law would be brought to parliament to avoid pre-empting the mines minister.

Some of the key players in Zimbabwe include Impala Platinum Holdings (Implats), the world's second largest producer of the metal, which has the biggest mining investments in Zimbabwe. Its bigger rival Anglo Platinum and Rio Tinto also have mining interests in the country.

Implats and Angloplat officials in Johannesburg said they were unaware of Zimbabwe's plan to re-check mining contracts, and would wait for more details before making a comment.