Western miners, 'If they are to continue mining, sanctions must go': Mugabe

Harare - President Robert Mugabe said on Monday Zimbabwe would punish firms from Western states who have slapped sanctions on senior officials in his Zanu-PF party, warning that global miners including Rio Tinto could be hit.

"We can't continue to receive the battering of sanctions without hitting back. We have to hit back," Mugabe told thousands of people attending a ceremony to commemorate heroes of Zimbabwe's 1970s independence war.

Mugabe, 87, and Zanu-PF members have had trouble tapping into international finance due to the sanctions imposed by Western countries for suspected human rights abuses and electoral fraud under the political veteran's watch.

"We will have to discriminate against countries that have imposed sanctions against us. Why do we need companies like Rio Tinto? If they are to continue mining, then the sanctions must go," Mugabe said.

He has previously called for a boycott of products from foreign countries backing the sanctions he says have hurt the country's wobbly economy. The United States and Europe blame Mugabe for gross mismanagement that caused the economy to collapse under hyperinflation about three years ago.

Mugabe has given several large foreign-owned mining companies to the end of September to dispose of at least 51% of their shares to locals as part of an empowerment drive that has worried foreign investors.

Bargaining table

Zimbabwe's youth and empowerment minister told a conference last month the government had rejected all 175 local ownership proposals it received from foreign mining companies, adding firms that do not meet the September deadline would be kicked out. .

Impoverished Zimbabwe does not have the money to buy controlling stakes in mines. But it is likely to use the threat to force global mining giants to the bargaining table so that Zimbabwe, with the world's second-largest platinum reserves, can receive more money from its mineral riches.

Mugabe has also increasingly turned to China for help after being shunned by the West.

Political analysts say that as Zimbabwe prepares for elections likely to be held in 2012, Mugabe will increase pressure on foreign companies but is unlikely to repeat the wholesale seizure a decade ago of white-owned farms, a move blamed for the destruction of Zimbabwe's agriculture sector.