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Zimbabwe mining royalties, dividends to fund new SWF

Source: Mon, 13 Jan 2014 15:22 GMT
Author: Reuters
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In this 2011 file photo, a Zimbabwean miner works underground at Metallon Gold mine in Shamva about 80 km (50 miles) north of the capital Hararre REUTERS/Philimon Bulawayo
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HARARE, Jan 13 (Reuters) - A proposed sovereign wealth fund in Zimbabwe will be bankrolled by as much as a quarter of royalties and special dividends earned on minerals such as diamonds, gold and platinum, according to a draft bill seen on Monday.

Finance Minister Patrick Chinamasa said in October Harare planned a sovereign wealth fund law by February but hinted at the time the government might not have any money at first due to the need to overhaul crumbling infrastructure.

But a Sovereign Wealth Fund of Zimbabwe Bill seen by Reuters on Monday said a "portion, not exceeding a quarter of royalties" from seven minerals, including gold, platinum and diamonds, would be paid into the fund.

It would also benefit from "a portion, not exceeding one quarter of the 'special dividend' on the sale of diamonds, coal-bed methane gas, granite and other extractable minerals" by the state-owned Minerals Mining Corporation of Zimbabwe.

The southern African country has said it wants a fund to buy shares in foreign-owned companies, including mines, under President Robert Mugabe's controversial black economic empowerment programme.

However, there were no provisions for this in the bill.

The bill is guaranteed to pass the two chambers of parliament where Mugabe's ZANU-PF party enjoys a commanding majority after a landslide victory in presidential and parliamentary elections held last July.

Mugabe is set to be the trustee and patron of the fund, whose board will be appointed by the finance minister.

(Reporting by MacDonald Dzirutwe; Editing by Ed Cropley)

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