(TIMES) Small-scale miners cry for equal treatment

Small-scale miners cry for equal treatment
By Maimbolwa Mulikelela

THOUGH moving at a snail’s pace, the small-scale mining sector is ready to unlock its 53 million tonnes of copper through concerted efforts from all small-scale mining players.

The inability for small-scale miners to use the abundant resources for a long time has been necessitated by many factors such as a lack of capacity for the miners to have proper machinery to extract and polish the minerals into finished products.

Also efforts over the years by the small-scale miners to be independent in as far as doing business is concerned had proved not only to be uneconomic but mining was becoming an unsustainable venture for them, hence the need for Government support.

The sector was endowed with a diversified mineral resource base, which include base metals, precious metals and gemstones, but the technical know-how is needed if the sector is to contribute positively to the gross domestic product (GDP), which is currently insignificant.

The question which begs answers is, where do the miners with much copper resources start from? The solution is in a roundtable discussion for all stakeholders.

Hence, the Government summoned all the small-scale miners for a roundtable discussion for the sole purpose of revamping the Federation of Small-Scale Mining Association of Zambia, which coordinates mining activities for small-scale mining.

Various small-scale mining associations from the seven provinces were engaged to try and draw up a long-term plan that would support the growth of the sector and, at the same time, address the challenges hampering the development of the industry.

Those present at the meeting were Lundazi Gemstones Association from Eastern Province, Association of Zambia Women in Mining and Development, Kalomo Miners Association from Southern Province and Emeralds and Semi-Precious Stones Miners of Kitwe, Mpika Small-Scale Miners, Mukushi and Serenje Miners.

Other member associations included Mumbwa Miners, Former Miners, Empowerment of Women in Gemstone and Mineral Mining, Solwezi Miners, Kabwe Miners, Luapula Province Miners and North-Western Province Miners.

The small-scale miners highlighted some of the challenges, which included lack of access to finance, high mineral royalty taxes and security issues.

Other difficulties were unfair dealings on the market and limitations in the availability of plant hire and mining equipment, among others.

Generally, small-scale mining operations are characterised by lack of adequate infrastructure and community facilities, which have contributed to the poor living conditions of the majority of the people involved.

Analysts have observed that small-scale miners work under unsafe conditions because mining operations are labour-intensive - mainly small-scale miners use steel pick hammers, shovels and wheelbarrows to break the ground.

Federation of Small-Scale Mining Association of Zambia president Pauline Mundia said that the small-scale mining sector was one of the industries faced with high mineral royalty taxes compared to foreign mining companies.

Mrs Mundia said it was not correct for the small-scale mining sector to be paying five per cent mineral royalties to the Government while large-scale mining companies were paying three per cent.

“It is not fair for us as small scale miners to pay five per cent of the mineral royalties to the Government when we are struggling to buy equipment for our operations while our big brothers pay less and they are granted concessions and incentives,” she said.

The small-scale miners are solely dependent on their own resources, with no assistance such as incentives from the Government as mining incentives have all tended to focus on the large-scale operations.

Mrs Mundia said most small-scale miners did not have proper information on tax contributions to the Government such as the submissions of company returns to the Patents and Companies Registration Office (PACRO) as well as Zambia Revenue Authority (ZRA).

Taxation
For the sector to record positive growth, relevant information on taxation and payment of annual returns should be readily available to the miners so that the Government could be able to capture the various activities of the small-scale mining industry.

With such a scenario, it is difficult for the Government to record small-scale mining activities in the national economy.

Lundazi Gemstone Association chairperson Charles Chilufya called for more consolidated efforts from all the small-scale miners in the country for them to stimulate growth.

Mr Chilufya said there was need for small-scale miners to stop working independently and start engaging each other for the sector to register positive growth.

Emeralds and Semi-Precious Stones Miners of Kitwe president, Victor Kalesha said in order to address the issue of security, there was need for the Government to assist the miners to establish the one-stop gemstone marketing centres in each province.

The one-stop gemstone marketing centre will act as a market where various minerals will be traded and kept.

For example, the Ndola one-stop gemstone marketing centres has facilitated for the small-scale miners in the province to trade their minerals in one place.

This has consequently reduced on the risks involved in moving the minerals from one area to another.

Lundazi Gemstone Association welcomed the development of the marketing centre as it was meant to promote the various trades on minerals in each province.

Mr Chilufya said that the association was in the process of establishing a one-stop gemstone marketing centre in Eastern Province.

“The centre will help the Government to keep track of what type of minerals are in each particular district or province and will also help the miners to market and sell their minerals in one place,” Mr Chilufya said.

The association applied to the local council for a by-law that restricts unfair dealings on the market in order to support the establishment of the one-stop gemstone marketing centre.

Commenting on the European Union (EU)-sponsored Mining Sector Diversification Programme (MSDP) fund that ended last year, Federation of Small-Scale Mining Association of Zambia reported that strides had been made towards the development of the roads in the specified mining areas.

The Government signed the MSDP financing agreement with the EU in October 2000, which become effective in 2001.

The project was aimed at facilitating the diversification of the mining sector and increase export of non-traditional mining products.

The projects that come to an end supported the promotion of small-scale mining products on the international market.

The MSDP provided training in all the major functions of a small-scale mining operations involving over 1,000 artisanal miners around the country.

Training was not only limited to mining and geology but also covered business management and other important aspects such as safety, health and environment.

As part of the agreement signed between the Government and the EU, any balance from the MSDP project should be channeled into the development of the road sector in specified mining areas.

It was against this background that 20.5 million euros left over from the MSDP was channeled to develop roads in small-scale mining areas.

The Federation of SmallScale Mining Association of Zambia said that funds had been released to the Government through the Ministry of Finance and National Planning for the development of mining roads.

Mrs Mundia said the Road Development Agency (RDA) had surveyed Itehi-Tezhi, Ndola Rural and other rural roads.

According to the small-scale miners, the loan facility under the Ministry of Mines and Minerals Development has not helped the miners in any way as those that have benefited from the K1.5 billion facility have not paid back the money to the Government.

The move has denied other miners an opportunity for them to expand their mining operations.

The miners noted that the K50 million granted to the miners was inadequate to support mining operations, as mining equipment was expensive.

The miners suggested that issues of mineral royalties should be addressed as well as support to infrastructure development.

Meanwhile, Mines and Minerals Development Permanent secretary, Godwin Beene, has challenged the small-scale miners to organise themselves into one strong grouping that will drive the agenda forward of the industry.

Dr Beene was concerned with 53 million tonnes of copper that were sitting idle in the hands of the small-scale miners.

It is in this light that the Government’s interest in mining has incorporated the idea of small-scale mining operations.

The Government has lined up programmes that will address various challenges facing the small-scale miners.

Firstly, a workshop is being organised in July this year with the support from the Federation of Small-Scale Mining Association of Zambia to look at issues of financing, mining rights, plant hire scheme, mobile processing plants, among others.

About two marketing exhibitions are underway scheduled for Lusaka and Livingstone to promote the various mining activities with the focus on the small-scale mining sector.

In addition, the Government has directed the federation to draw up a budget for the establishment of one-stop gemstone marketing centres and bureaus in each province.

The federation has also been tasked to come up with the budget for the two exhibitions.

The gemstones industry includes emeralds, amethyst, aquamarine, tourmaline, garnets and citrine and, if organised, could stimulate growth in the economy.

Dr Beene said mining provided the much-needed inputs for agriculture and agro chemicals, industrial manufacturing of a wide variety of products such as ceramics, paint and special raw materials for the building industry.

According to Dr Beene, one out of 31 small-scale miners who obtained loans of more than K1 billion from the ministry have not paid back the money.
Each of the 31 miners was given K65 million, bringing the total disbursements to K1.5 billion.

Dr Beene, however, bemoaned the tendency to fail in paying the loans by the small-scale miners as a drawback in the development of the initiatives.

The culture of not paying back loans is killing good initiatives. There is need to develop the attitude of paying back loans for others to benefit.

Dr Beene acknowledged that the loans given to small-scale miners were not enough to finance their mining activities but efforts should be made to repay the loans obtained from the Government.

The permanent secretary appealed to small-scale miners to monitor the MSDP funds meant for the road development and ensure that roads were constructed.

“This is donor funds, please make sure your roads are done because we don’t want the money to be used for other activities,” Dr Beene said.

The sector, despite the many problems, generates employment and income, as it has become an easy entry point into self-employment for both women and men, as well as the marginalised groups.