(TALKZIMBABWE) ‘Zim govt to revisit mining legislation’

‘Zim govt to revisit mining legislation’
Ralph Mutema
Thu, 06 Nov 2008 02:39:00 +0000

THE Government of Zimbabwe has been urged to revisit mining rights so as to enable the country to benefit from the very lucrative industry. The call was made by the former Zimbabwean Ambassador to China, Chris Mutsvangwa.

Mutsvangwa said the current ownership of mining rights in the country was tantamount to “daylight robbery” and many impoverished Zimbabweans were not benefiting from the vast mineral resources in the country.

“The current ownership structure of mining rights is still very much neo-colonial in nature,” said the ambassador adding that this is “tantamount to daylight robbery”.

Mutsvangwa who is a Zanu PF Information Committee member and strategist, urged the government to extend the current indigenisation laws to include the mining industry.

Earlier this year, Zimbabwe passed the Indigenization and Economic Empowerment Act which seeks to create an enabling environment that will result in increased participation of indigenous people in Zimbabwe in the economic activities of the country. The Act also makes provision for the establishment of an Indigenisation and Empowerment Fund to provide finance for the indigenous people in the acquisition of shares, working capital and other forms of finance.

A stake of at least 51 per cent shareholding in the majority of businesses in all sectors of the economy will have to be in the hands of indigenous people, under this legislation.

The government proposed separate legislation for the mining industry. The Mines Ministry proposing that 40 percent of the shares in mine companies would be nationalized without any compensation.

Zimbabwe is not the only country that has made such a proposal. African, especially Southern African Development Community countries where there are vast mineral deposits, have passed indigenization laws.

The West African country, Mali, the third highest gold production in Africa (after South Africa and Ghana) has 51 percent shareholding [in gold mines], while Namibia and Botswana have 49 percent in their diamond mines. South Africa is also considering such legislation.

Mutsvangwa who was speaking at a business function held in the capital, said indigenization legislation was necessary to correct colonial imbalances.

He also urged young people to get involved in the mining sector so that they can acquire skills necessary to develop the country in the future.

A trust was set up to encourage young people to develop skills in mining and get involved in one of Zimbabwe’s highest foreign currency earning activities – Youths in Mining and Environment Trust (YIMET)

Speaking at the same occasion, marking the launch of the YIMET, the Chairman of the organisation said his organisation will develop the youth in Zimbabwe in the area of mining and national resources exploitation to enhance production in the mining industry.

Mutsvangwa’s statement comes at a time when Zimbabwe is said to be currently losing US$1.2 billion a month to illegal diamond dealing.

Analysts believe Zimbabwe has enough mineral deposits to turnaround the economy if the production and marketing is properly managed. The country boasts gold, platinum and chrome as the principal endowments. The country’s gold reserves are among the largest in the African region, while it hosts the second-largest platinum reserves in the world.

Diamond mining started only four years ago with the discovery of kimberlites in the Manicaland region, but already the industry is fast becoming the major foreign currency earner. With an estimated US$1.2 billion being lost to smuggling every month, the country stands to benefit from a well-managed diamond production industry.

The mining industry earns Zimbabwe over 40% of its total export revenues. Conservative industry estimates say the industry could account for over 60% of export revenue in the next ten years.

Zimbabwe, however, has not been able to derive the full benefits of its myriad mineral resource base. Rather than expanding, the industry is forecast to register an average annual contraction of 1.5% during the 2008-2012 period.