By Olad Hassan

Zimbabwe is entering a new era in relations with the world amid signs of increasing investor interest and the ongoing negotiations between ZANU PF and MDC to lay out a new political direction for the country.

The list of talks and events is long, starting from the meetings between the country’s two main parties on issues such as power sharing, government posts, economy and media reforms to this week’s ZANU PF party congress, where delegates are going to discuss the future of the party and who is going to continue leading ZANU PF.

On the side lines the country’s Finance Minister has recently announced that the Zimbabwean economy (GDP) will grow by 7 percent in 2010. The budget for next year includes a reduction of corporate tax to 25 percent from 30 percent, a move welcomed by companies and investors. The Minister hopes that a substantial part of the money for the Budget will come from the countries vast mining resources.

Investors should look out for Zimbabwe as a potential investment opportunity as mining shares seem to be undervalued given the vast mining potential of the country.

However, analysts say as long as there is no better access to capital for mining companies and no trustworthy unity government in place investors should be cautious to gamble their money.

At the other hand shares of mining companies in Zimbabwe can be obtained at a very low price which might yield high returns in future. Bargains always come with a risk and Zimbabwe certainly appears to be an uncertain destination for investors.

But the fact that mining companies in Zimbabwe are re-opening and some have already managed to find financiers in order to start production is encouraging.

For example the Chinese ahead of time entered the mining market and recently expressed their interest to upgrade the countries transport infrastructure. Western companies such as Anglo American announced to invest millions in order to explore platinum and several locally owned mines have by now started producing and exporting natural resources.

Companies to watch out are:

Mwana Africa PLC. (LON:MWA)

Caledonia Mining Corporation (OTC:CALVF)

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