President Robert Mugabe's threat to nationalise foreign-owned mines has sent additional jitters through the country's beleaguered financial markets.
Mr John Hollaway, a mining consultant, said Mr Mugabe's remarks were expected to have severe repercussions in Zimbabwe, which depends heavily on mining revenues, and may also cause harm elsewhere in southern Africa.
"Mining is highly capital-intensive, and this will make investor worries resurface throughout the region. Investors will be asking whether their money is safer elsewhere," he said.
Mr Mugabe said in an interview with Britain's Independent newspaper that his government was eyeing foreign-owned firms, including some 400 British-controlled businesses, for possible seizure as part of his campaign to Africanise his country's assets.
The government has supported the violent and illegal occupation by members of Mr Mugabe's party of more than 1,400 white-owned farms since February.
Mr Mugabe told the Independent that foreign-owned gold, copper, asbestos and iron mines face seizure once his government completes the handover of white-owned land to landless blacks after elections on June 24th and 25th.
"There must be Africans as owners, not just as workers," added Mr Mugabe, who said there were "too many Britons" in Zimbabwe.
Britain said the move would backfire on Mr Mugabe and risk bankrupting his country. The Foreign Office minister Mr Peter Hain warned him not to carry out his threat, saying it would "discourage the foreign investors that Zimbabwe so desperately needs", adding: "This is more pre-election posturing."
Mining, mainly of gold, is the second-biggest earner of hard currency after agricultural exports.
Mining in neighbouring Zambia and Tanzania declined during two decades of state control, and has begun to recover after being privatised over the past decade, Mr Hollaway said.
The Movement for Democratic Change, the main opposition group, denounced the President's remarks. Mr Eddie Cross, a spokesman for the group, said Mr Mugabe's "electoral strategy" had already destroyed the agriculture-based economy and now threatened the viability of the mining industry.
"It undermines the prospect of economic recovery and any future direct foreign investment. It exacerbates capital flight and is an act of gross irresponsibility," Mr Cross said. Mr David Murangari, chief executive at the Chamber of Mines, the body representing the main private mining companies, said Mr Mugabe's comments were being analysed by mining industry executives.
