Policy and legal factors affecting investment in the mining industry: The case of Zimbabwe

The research study sought to highlight the policy and legal factors affecting investment in the Zimbabwean mining industry in general and the mining of diamonds and gold in particular. Zimbabwe being home to more than 40 economically exploitable minerals has been undergoing changes to the policies and laws around the governance of those minerals. This research was prompted by the current debate and topical issues arising from the resource nationalism which is not only akin to Zimbabwe but to other resource-rich nations both in the developing and developed nations. The problem statement emanates from the numerous policy changes instituted by the Government of Zimbabwe in the mining industry. The overriding objective therefore was to bring to the fore the policy and law changes affecting the foreign direct investment inflows into the mining sector especially gold and diamonds. The study utilised the multiple case study research technique to extract mostly qualitative data. A survey was conducted, on a sample size of 51 respondents picked from a population of 66 elements comprising of Murowa Diamonds, Freda Rebecca, Reserve Bank of Zimbabwe (RBZ), Ministry of Mines and Mining Development (MMMD) and Chamber Of Mines Zimbabwe (COMZ) management employees. Senior management employees were targeted in this research study since policy formulation is highly understood and appreciated at that level of the organisations chosen. The research findings are that investments in the diamonds and gold mining are affected by the inconsistency in mining legislative and policy formulation. The research also revealed that Zimbabwe does not necessarily have the highest taxation regime in the region but needs to stabilise policy formulation to offer an environment which allows investors to plan better.