Monday, May 14, 2012
Monday, 14 May 2012 00:00
From Martin Kadzere in Victoria Falls
The Zimbabwe Chamber of Mines is working on the establishment of a mineral development policy that will guide the formulation of legislation, fiscal measures and Government interventions targeted at the sector.
The policy will provide a developmental compass for stakeholders involved in the mining industry and provide clarity on what the industry is expected to do and how its roles can be achieved, Chamber of Mines president Mr Winston Chitando said while addressing delegates at the chamber’s annual conference last week.
“There is great opportunity to develop a mineral development policy that can be the anchor for the minerals sector development,” said Mr Chitando.
He said the chamber would submit its proposal to the Government. The mining industry and Government have on several occasions disagreed on policies, which include the indigenisation and empowerment policy that requires foreign-owned firms to sell 51 percent equity to indigenous Zimbabweans.
The industry is also challenging Government’s recent increase in mining fees and royalties that it says will deter investment into the mining sector. Mr Chitando also called for policy consistency saying “the conditions that prevail at a time of deciding to invest must be held constant for as long as possible to ensure that the projects are viable and offer predetermined returns on investments”.
He said policy reversals are not beneficial to investment in mining. “Thus Government is urged to consult stakeholders more extensively and intensively to arrive at measures that can withstand the test of time thus providing for an environment of stability,” said Mr Chitando.
On royalties, Mr Chitando said the framework was on the high side and places a heavy burden on mining finances. Government has defended the increases saying it was meant to curb speculative practices.
“The recent review of royalties for gold, platinum and diamonds are now much higher than those of the regional competitor countries and certainly much higher than global averages. There is scope for review of these royalties.”
Mines and Mining Development Minister Obert Mpofu told the same conference that the increase in mining fees and charges in January were meant to discourage individuals and companies who were holding on to claims for speculative purposes.
He said mechanisms have been put in place that will lead to the release of idle ground to serious investors to stimulate mineral production.
Registration charges for platinum and diamond claims rose to US$2,5 million and US$5 million, respectively. Claim holders are required to pay annual ground rentals ranging from US$500 per hectare for chrome and US$3 000 per hectare for diamonds.