Last month, Zimbabwe published the final regulations for the controversial empowerment law, which has been on the cards since 2007, giving foreign mining companies 45 days to submit compliance plans. Among other things, the economic indigenisation provisions released in a government gazette for the mining sector seek to force foreign mining companies with a value of more than $1 million to sell majority stakes of 51% to black Zimbabweans.

The publication of the final regulations for implementation of the law have had an effect on mining stocks across the world, with Zimplats and Aquarius suffering huge losses on the JSE and Australian stock exchanges in the days following the announcement. Other companies, such as New Dawn Mining Corporation, have indicated that they are reviewing the impact of the law on their Zimbabwean operations.

New Dawn has massive gold mining ventures in Zimbabwe, but the company's main property is the Turk and Angelus gold mine in the south of the country, while Zimplats, a subsidiary of JSE-listed platinum producer Impala Platinum, runs the Ngezi platinum complex, a few kilometres outside the country.

There are other foreign mining companies operational in Zimbabwe and these include Caledonia Mining Corporation, which owns the Blanket gold mine, Rio Tinto, which jointly owns the Murowa diamond mine, and Anglo Platinum, which is spearheading the Unki platinum mine, which has just become a full-scale platinum miner following years of development.

"The recently announced fast-track indigenisation of the mining sector will weigh heavily on growth and poverty reduction prospects," said Vitaliy Kramarenko, the International Monetary Fund (IMF) representative for Zimbabwe.

Government officials aligned to President Robert Mugabe's Zanu-PF party have said that there is no going back on the legislation and that mining ventures "should be controlled" by "indigenous" Zimbabweans. Last month, Mugabe re-affirmed this, saying Zimbabweans should be "senior partners" in mining ventures.

Pan-African resources company Mwana Africa's CEO, Kalaa Mpinga, is currently in Zimbabwe assessing the likely effect of the new law on the company's investments. Mwana Africa operates the Bindura nickel complex and owns the Freda Rebecca gold mine.

According to an update yesterday, the Freda Rebecca mine's total indicated mineral resource stands at 1.67 million ounces of gold, significantly up from the previous estimate of about one million ounces. Additionally, Mwana Africa, which has a 100% interest in the gold mine, said it was committed "to sell 15% to local partners" as part of measures to comply with the country's indegenisation laws.

But still, just like several other foreign miners in Zimbabwe, Mwana Africa is not sure whether progress already made will be enough to avoid the catastrophic ceding of 51% shareholding. "If you take our staff incentivisation scheme into account", says Mwana Africa chairman Oliver Baring, "then we are indigenised already."

But this is not certain, with Zimbabwe's empowerment minister, Savior Kasukuwere, saying earlier that empowerment credits and social responsibility projects will not be taken into consideration.

Bart Melek, who heads TD Securities' commodity strategy division, says: "A harder form of resource nationalism can totally squeeze out private capital and often cause production declines and resource degradation. A hard form of resource nationalism can include partial or total confiscations of producing facilities." He adds that efforts at nationalising Zimbabwean mines "could well be a mistake" that could "embolden African National Congress (ANC) youth league leader Julius Malema to again make calls for the nationalisation of SA's mines".

Investors have also been particularly concerned by a new provision in the regulations announced in March, which say the majority stakes can only be disposed of to state-controlled entities such as the Zimbabwe Mining Development Corporation (ZMDC), the Minerals Marketing Corporation of Zimbabwe (MMCZ) or any other such state-controlled entity.

Most local economists are of the view that such a development could result in only well-connected politicians gaining control of the mining companies, as they have access to state funds. Moreover, calls for the nationalisation of Zimbabwe's mines, they say, are ill-timed, especially as they come at a time when Zimbabwe's economy has not yet stabilized and the country could benefit from investments by foreign mining companies.