Amend Indigenisation Act
Zimbabwe faces two priorities when it comes to investment: we need external capital to develop rapidly, and we would like the benefits of this development to be shared by the people rather than solely going to the investor.
To answer this second requirement, there are provisions in the Indigenisation Act that can theoretically force external investors to sell off 51 percent of their business to indigenous Zimbabweans, and even force local non-indigenous citizens to do the same.
There are also provisions in the Mines and Minerals Act for high levels of local investment although in that legislation there is also provision for this to be varied where there is a substantial foreign investment; but it is not an automatic right.
Investors are seeking changes; they say that the present requirements, even when not enforced, are unreasonable and discourage them from making the sort of investments they would like to make.
An additional problem is that the legislation as it exists would favour wealthy indigenous Zimbabweans, rather than the small investor and even the State.
At the same time some of the large investors have created whole new industries and towns in Zimbabwe to support their operations, already giving quite a bit to the country.
We refer to the comments by President Mugabe on his several visits to Zimplats when he has referred most favourably to the sort of development the largest single investor since independence has created.
We do not see a major conflict between the twin desires of external investment and local benefit. But we believe that there should be far more options than those laid out in the Indigenisation Act and that some of these options should allow ordinary Zimbabweans to participate and should allow the State to benefit as well.
The Zimbabwe Stock Exchange offers an obvious vehicle for raising local capital and allowing ordinary people and pension funds to invest in major projects.
So one option might be to encourage external investors to list on the local bourse.
We might need a special category of shares, so that only Zimbabweans and local funds, rather than foreigners, could buy these shares, but that should not be an insurmountable obstacle. The external investor would have some of their investment covered by local capital.
In the mining world, we should remember that the Zimbabwe State owns the mineral rights, having bought them off the British South Africa Company in the 1930s. Owners of mineral rights can set royalties and the BSA Company used to set some pretty stiff ones once. Governments here though have set a zero royalty.
Perhaps we need to change this. Zambia now sets a very modest royalty, of 3-5 percent, and has found this solves a lot of problems. There is no argument over mining taxes, a notoriously difficult subject, no problem with transfer pricing, no need for a State shareholding and an immediate benefit to the people as a whole.
The very small percentage royalty in terms of income would be equivalent to the profits on a far vaster shareholding; the royalty being pure income with the investor still covering costs. South African companies dislike royalties, not really understanding them since in that country a landowner owns the minerals underneath, but they have adapted well in Zambia.
It should be possible to introduce in Zimbabwe a complex formula whereby the percentage of shares that need to be sold locally, the royalties payable and the investment into infrastructure could all be offset against each other. It might be possible, for example, for infrastructure investment, or at least a significant percentage of this, to be taken from the future royalties.
A percentage of dividends payable to local investors could also be deducted from royalties.
The formula would present options to the investor. One who spent much on infrastructure and floated a modest percentage of shares on the ZSE would pay minimum royalties. One who wanted to keep everything and invest as little as possible in ancillary development would pay royalties at the top rate.
In all cases Zimbabwe and its people would benefit, one way or the other, yet an investor would be able to choose how they paid for the right to mine.
Obviously, this sum for mining rights could not be set too high, but it should be possible to work out a price that will not discourage investment yet still benefit the people and so, through options and offsets, ensure continued investment and ensure that Zimbabwe benefited as well.
Labels: BEE, MINES AND MINERALS ACT
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COMMENT - " ZIMBABWE'S parliament will debate legal reforms badly needed by the battered economy " like repealing ZDERA which destroyed the currency. Not introducing neoliberal 'reform' that they could not push through under normal (non-Shock Doctrine) circumstances.
Mines law dominates new parliament
by Cris Chinaka
06/10/2009 00:00:00
ZIMBABWE'S parliament will debate legal reforms badly needed by the battered economy, including the crucial mining sector, in coming weeks, but analysts say foreign investors will wait to see how the laws are applied.
President Robert Mugabe opens a new session of parliament on Tuesday which officials say will consider amendments to the Mines and Minerals Act and a bill governing the operations of the central bank.
Mugabe told a mining conference last month that the government would pass a law on the sector soon and would address concerns raised by an earlier draft that would have given locals control of mining operations owned by foreign companies.
Several mining firms, including the world's two biggest platinum producers, Anglo Platinum and Impala Platinum, have retained operations in Zimbabwe but largely put new projects on hold, fearing the mines could be taken over by the state.
Details of the new legislation have not been published, but analysts say investors will be looking for a firm commitment by the power-sharing government to private property rights and the rule of law.
"The new law will be very important but the most important issue for investors will be to see how the law is applied in practice," said John Robertson, a Harare-based economic consultant.
"We have such a bad history here now that nobody takes the government on its word, and so any good words will have to be accompanied by good deeds," he said.
After the collapse of commercial agriculture, mining emerged as Zimbabwe's largest foreign currency earner, with gold alone bringing in a third of total mineral export receipts.
Analysts say uncertainty over government policy will likely hold back big new mining investment in Zimbabwe for years as many foreign investors are still shaken by Mugabe's seizures of white-owned farms for redistribution to blacks under an empowerment drive.
Foreign companies with operations in Zimbabwe include Angloplat, Implats and Rio Tinto, majority owner in the country's biggest diamond mine.
Mugabe formed a unity government with opposition leader and arch-rival Morgan Tsvangirai in February to try to end a decade-long political crisis which ruined Zimbabwe's once prosperous economy.
But the fragile coalition between Mugabe's Zanu PF party and Tsvangirai's Movement for Democratic Change (MDC) is threatened by policy differences, the slow pace of reforms and feuding over some top state jobs.
Besides the mining bill, the new session of parliament -- which runs for a year -- is expected to consider changes to the operations of the central bank.
Central bank governor Gideon Gono, a Mugabe ally, has had a strained relationship with Finance Minister Tendai Biti, a senior MDC figure. Biti will present the 2010 national budget to parliament next month.
The government says it needs up to $10 billion in foreign aid to help repair an economy which saw inflation surge to over 500 billion percent in 2008, according to the IMF.
In January, the government introduced foreign currencies to stem the hyperinflation that had made the Zimbabwe dollar worthless. Inflation fell to 0.4 percent in August from one percent in July. - Reuters
Labels: MINES AND MINERALS ACT, NEOLIBERALISM
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Parliament passes Mines Act
Written by Ernest Chanda
Friday, March 27, 2009 4:15:23 PM
PARLIAMENT on Thursday passed an amendment to the Mines and Minerals Development Act that seeks to open up investment in industrial minerals to foreigners.
According to the 2008 Mines and Minerals Development Act, mining rights for industrial minerals were only to be granted to Zambian citizens and companies of Zambian citizens.
The Mines and Minerals Development (Amendment) Bill passed through to committee stage after extensive debate at second reading.
And debating the same motion, Siavonga UPND member of parliament Douglas Siakalima accused government of taking everything away from Zambians.
"I'm extremely petrified, extremely horrified that this government is pulling everything away from Zambians. If their only purpose is to make citizens labourers then I don't know the intention of government. Why is it that it is a Zambian who has to bend all the time?" Siakalima asked.
"Two days ago you removed the windfall tax and now you are giving away the rights of Zambians to invest in minerals. Why is it that it is only in Africa where we have to bend? We bended the other time when Africans were sold as slaves. Who were selling slaves, is it not our chiefs? And that is how colonialism came in. They went with our minerals and now upon realising that we still have some minerals these people are coming back. And we are again bending. I think Africa is the only confused continent."
And Kasama Central Patriotic Front (PF) member of parliament Saviour Chishimba said it would be irresponsible for this generation to fail to work for the next generation.
"It would be irresponsible for this generation to fail to work for the next generation. In Zambia one does not need to pay for information. Information is available on the street. The people of Zambia have facts that this government is amending a law to accommodate one individual who is coming to manufacture cement. I would not be surprised to see that after this Bill is amended we start receiving friends of ministers as investors in the mines. Whatever we do today should not just benefit us, it should not just benefit Chishimba. If I benefit today, what has that got to benefit the country?" asked Chishimba.
"It is very clear that the MMD have horrendously failed, they have run out of ideas. That's how far their capacity can take them. It is a sign that the statecraft should be taken over by a new leadership with new ideas. This country can't afford to hide in procedures that can't work."
Labels: DOUGLAS SYAKALIMA, FDI, MINES AND MINERALS ACT, NEOCOLONIALISM, NEOLIBERALISM, PARLIAMENT
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NUCIW opposes proposal to amend mines, minerals Act
Written by Florence Bupe
Sunday, March 22, 2009 4:42:00 AM
THE National Union of Commercial and Industrial Workers (NUCIW) has criticised the Ministry of Mines’ proposal to amend the mines and minerals Act of 2008. But mines minister Maxwell Mwale said the Act has to be amended to
accommodate foreign investors in order to boost the mining industry.
NUCIW president Seth Paradza said the amendment of the Act would work against the empowerment of Zambians in the mining industry.
“If the amendment of the Act is allowed to go through, then it will defeat the whole purpose of empowering Zambians in the mining sector. We have a number of our members, for instance, who own shares in the Lafarge quarrying industry because of the empowerment facilitated by the Act which they (government) are now seeking to amend,” he said.
Paradza charged that the amendment of the Act to allow foreign investors to actively participate in the mining of industrial minerals was retrogressive to efforts to empower Zambian investors.
But Mwale said it was only prudent to amend the Act to boost operations in the industrial minerals sector.
“Under the mines and minerals Act of 2008, industrial minerals were left to be mined by Zambians. This was done with a view to encourage and empower Zambians,” Mwale said.
“However, the Act has to be amended to accommodate foreign investors. When we drew up the Act, we did not envisage there would be interest by foreign investors to mine, for example, sand.”
Mwale said it was necessary to make exceptions for operations such as the mining of cement as there was massive capital output.
Last week, the Ministry of Mines presented a proposal to Parliament to have the mines and minerals Act of 2008 amended.
And the parliamentary committee on Economics on Wednesday described as highly suspicious Zambia Development Agency (ZDA)’s support to have section seven of the mines and minerals Act of 2008 amended. This was after ZDA director general Andrew Chipwende, who appeared before the committee, said maintaining the clause would restrict foreign investors who wished to undertake major projects in the production of cement and phosphate fertiliser in Zambia.
Section seven of the mines and minerals Act of 2008 which the Ministry of Mines has proposed for amendment provides that a mining right for industrial minerals shall only be granted to a person who is a citizen of Zambia or a citizen-owned company. Industrial minerals include, among others, limestone and gypsum used in the production of cement and quicklime as well as phosphates used in the production of phosphate fertilisers.
Labels: CORRUPTION, FDI, MAXWELL MWALE, MINES AND MINERALS ACT, NEOLIBERALISM, NUCIW, SETH PARADZA
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Zambia Approves Amendment to Mining Act to Increase Taxes
By Geoffrey Kapembwa
March 26 (Bloomberg) -- Zambia's parliament approved an amendment to the Mines and Minerals Act that will increase taxes and abolish existing agreements between the government and mining companies, the Zambian Chamber of Mines said.
The bill, which will be signed into law by President Mwanawasa on April 1, will lift royalties on sales fivefold to 3 percent and increase corporate income tax to 30 percent from 25 percent. That will raise the effective tax rate on miners to 47 percent from 31 percent.
The government's ``unilateral decision to dishonor existing development agreements'' is disappointing, Fred Bantubonse, general manager of the chamber, said in a telephone interview from the capital, Lusaka, late yesterday. ``This is arm twisting.''
Zambia, Africa's largest copper producer, expects to earn $450 million in additional revenue this year from higher mining taxes as it seeks to benefit from the metal's seven-year rally, Kolombo Mwansa, the southern African country's mines and mineral development minister said on March 4.
The law will result in miners reconsidering any expansion projects because of poor returns, Bantubonse said.
``Any bad law always affects future investment,'' he said.
Copper accounts for about 70 percent of Zambia's export income and production has been rising since the nation sold off state-owned mines 1999, almost three decades after they were nationalized. The proposed increase in taxes comes amid record profits earned by companies including Vedanta Resources Plc., India's largest copper producer, and First Quantum Minerals Ltd., a Vancouver-based miner of copper in Africa.
-- Editor: Athol Bolleurs, Dylan Griffiths.
To contact the reporter on this story: Geoffrey Kapembwa in Lusaka via the Johannesburg bureau at +27- abolleurs AT bloomberg.net.
Labels: CHAMBER OF MINES, FREDERICK BANTUBONSE, MINES AND MINERALS ACT, MWANAWASA
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Mine proprietor backs proposed mines bill
By Kabanda Chulu
Wednesday March 26, 2008 [03:00]
KASONSO Mines proprietor Doreen Mwamba yesterday said the proposed mines bill will help to bring sanity in the issuance of small scale-mining licences. Under the existing mines and minerals Act, Cap 213, an artisan's mining right is the only one reserved for Zambian citizens but the government was proposing to add to this, other small-scale mining rights.
Welcoming government's intention to restrict all small-scale mining rights to Zambian citizens and citizens owned companies, Mwamba said there had been anomalies at the ministry of mines licence issuance department because foreigners were given preference.
"As women small-scale miners, we are happy with government's intentions to address anomalies happening in the issuance of licences where foreigners are given preference at all costs despite Zambians having the capacity to develop the mining sites," said Mwamba. "Also owing 51 per cent or more shares will enable Zambians to have a controlling stake in the affairs of the mines."
Kasonso small-scale mines are located in Kasempa district in the North Western Province and normally deal in copper ores.
During the Civil Society Trade Network Zambia, trade and development consultation meeting recently, mines deputy minister Maxwell Mwale said the government would restrict all small-scale mining rights to Zambian citizens and citizen-owned companies.
He said the mines and minerals development bill of 2008 was intended to address post-privatisation challenges and national aspirations that included the need for Zambians to participate more in the ownership of the mines.
"However, Zambians will remain free to enter into mine development partnerships with foreign investors, but only up to 49 per cent equity participation by non-Zambians," said Mwale.
Labels: KASONSO MINES, MINES AND MINERALS ACT
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Govt to restrict small-scale mining rights
By Kabanda Chulu
Wednesday March 19, 2008 [03:00]
MINES deputy minister Maxwell Mwale has said the
government will this year restrict all small-scale mining rights to Zambian citizens and citizen-owned companies. During the Civil Society Trade Network Zambia, trade and development consultation meeting, Mwale said the mines and minerals development bill of 2008 was intended to address post-privatisation challenges and national aspirations that included the need for Zambians to participate more in the ownership of the mines.
He said the government was proposing to repeal and replace the 1995 mines and minerals Act because it was meant to promote privatisation of the Zambia Consolidated Copper Mines, which was done and now was the time to address the challenges of post-privatisation aspirations.
“However, Zambians will remain free to enter into mine development partnerships with foreign investors, but only up to 49 per cent equity participation by non-Zambians,” said Mwale.
Under the existing mines and minerals Act, Cap 213, an artisan’s mining right is the only one reserved for Zambian citizens but government was proposing to add to this, other small-scale mining rights.
Mwale further said that the new bill would cater for the removal of the provision for the minister to enter into development agreements.
The bill would also provide that existing development agreements should cease to be binding on the Republic of Zambia.
Labels: ECONOMIC EMPOWERMENT, MAXWELL MWALE, MINES AND MINERALS ACT, MINING
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Mine tax defaulters to be fined
By ANGELA CHISHIMBA
MINE companies that fail to pay royalties 14 days after the end of the month in which the sale of the minerals is done will be prohibited from conducting further business outside their mining areas when a bill before Parliament is enacted. This is according to the
Mine and Minerals Development Bill 2008 which was tabled before Parliament by Minister of Justice, George Kunda on Friday. The proposed law will
repeal and replace the Mines and Minerals Act of 1995.
“Where the holder of a mining right fails to pay any royalty payable on or before the due date or any extension thereof allowed by the Zambia Revenue Authority Commissioner General, the Commissioner General may by order served on the holder, prohibit the disposal of any mineral from the mining area concerned until an arrangement has been made that is acceptable to the Commissioner General for the payment of the royalties,” the bill reads.
The bill states that any holder of a mining right who contravenes or fails to comply with an order given commits an offence and shall be liable upon conviction to a fine not exceeding five hundred thousand penalty units or imprisonment for a term not exceeding five years, or both. In the case of a corporate body, it would be liable to a fine not exceeding one million penalty units.
“Where payment of any royalty is deferred, it shall be accumulated with any other deferred payment of royalty which is outstanding and the amount outstanding should be payable when the royalty is due,” the bill states.
It states that holders of large-scale mining and gemstone licences and small scale mining and gemstone licences shall pay a mineral royalty at the rate of three per cent of the normal value of the base metals produced or recoverable under the licence.
The bill is to be tabled in Parliament this week for second reading.
In the 1995 Mines and Minerals Act, a royalty is payable but calculated at two per cent of the market value of minerals, less the cost of smelting, refining and insurance, handling and transportation from the mining area to the point of export or delivery within Zambia.
Royalty payments could be deferred if the cash-operating margin of a holder of a large-scale mining licence falls below zero.
Labels: GEORGE KUNDA, MINE AND MINERALS DEVELOPMENT BILL 2008, MINES AND MINERALS ACT, WINDFALL TAX
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Idle infrastructure to be repossessed
By Times Reporter
GOVERNMENT has started repossessing all infrastructure from licence holders who have not utilised them to enable new investors to take over. The Government will implement this decision next month after giving the organisations a grace period for them to comply with the provisions of the Mines and Minerals Act.
President Mwanawasa said this yesterday in a speech read for him by his Vice-President Rupiah Banda at the official opening of the African Mining Congress at Living stone’s Zambezi Sun Hotel.
Dr Mwanawasa said it was sad that many new investors could not access the vast landscape in Zambia because most of it has been taken up by mineral rights of one form or another, only for speculative purposes, rather than investment.
“Little or no work has been done on the tenements to permit partnership with other investors. Some holders of prospecting licences have outlived the legal limit and are denying other investors opportunities on the tenement,” Dr Mwaanawasa said.
He said because Zambia was implementing a policy of ‘use and leave it”, all tenements that had not been utilised by the licence holders would be repossessed by the Government.
The decision had been taken after an audit of all tenements found that many licence holders had not complied with the Act.
The licence holders had however, been given up to March 15, 2008 to comply.
“There are more than 380 gemstone mine owners and over 80 other small scale mining licence holders with accumulated unpaid area charges in excess of K10bn contrary to the law, “ the President said.
He said Government was determined to open up the Zambian landscape to investors hence, the cancellation whether the defaulters were holders of large scale or small mining rights before the new mining cadastre system opened to the public after March 31, 2008.
On the fiscal and regulatory policy changes on new mining investment in the sector, Dr Mwanawasa said the measures would not discriminate between owners of the old privatised mines and the new investors.
He stated that although some quarters had argued that new investors should be given exemptions from the fiscal and regulatory regime requirements because they had incurred debts to realise their investment, Government would treat all equally.
He said Government was aware that investors brought money into Zambia and was mindful that some owners of the old mines were investing in new projects largely by using money generated by the old mines.
He therefore encouraged the various mining companies at the congress to hold discussions and get into partnerships in the mining sector on how to enter into partnerships.
On the gas and petroleum sector, he said Government had received several enquiries from companies registered in UK, USA, Russia, China and South Africa wanting to invest in the sector.
He said Government was ready to give these companies an opportunity to invest in the petroleum sector because it would contribute largely to economic growth and strength.
He said analyses of samples collected from North-Western, Eastern and Western provinces strongly suggested the presence of oil and gas in the areas, which demanded that investors should quickly be given opportunities to invest in the promising regions.
And for this reason, Government would repeal the 1985 petroleum (exploration and production) Act to accommodate the changes to suit the current situation.
The conference is being attended by 30 mining companies from all over the world.
And speaking earlier, Meetings International Natural Resource Enterprise (MINE LLC) Chief Executive Officer Michelle Ashby said as the commodity markets continue to surge under world wide demand, Africa plays a key role in developing the required resources.
She said MINE LLC which hosts the Annual African Mining Congress organises investor meetings for natural resources, mining and modern energy industries adding that this year, over 30 mining companies are being featured at the on going congress.
Ms Ashby said the conference provides an ideal opportunity for mining companies to interact with a very targeted and interested group of investors by providing direct access to a number of interesting projects.
Labels: FDI, INFRASTRUCTURE, MINES AND MINERALS ACT
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Zambia: State to Dump DAs
The Times of Zambia (Ndola)
8 February 2008
Posted to the web 8 February 2008
Ndola
GOVERNMENT will not renegotiate the Development Agreements (DAs) with the mining companies and that a new mining regulatory law will be proposed which will, among other things, remove the requirement to enter into DAs. Acting Secretary to the Treasury, James Mulungushi said section nine of the Minerals Act was being proposed for amendment by repeal and replacement.
Dr Mulungushi said this in Lusaka yesterday when he appeared before the expanded parliamentary committee on estimates at Parliament buildings chaired by Itezhi-Tezhi MP, Godfrey Beene.
He said the provisions and protection of the DAs would be in the relevant laws and regulations.
"The new mining regulatory regime will, therefore, do away with the requirement for Development Agreements," he said.
He said Parliament and the Zambian citizens should support the new measures and the stance taken by the Government not to renegotiate the DAs with the mining companies.
He said support was also required to put in place a mining law that would, among others, remove the requirement of DAs.
Attorney-General Mumba Malila said the mining firms should understand that the Government was doing this in good faith.
He said the Government at the time it entered into these DAs might have been in a state of desperation.
"We hope the mining companies will understand where we are coming from. We want to handle this amicably," he said.
Mr Malila said the DAs could not stop the Government from making a law and said all the good things in the DAs would be captured in the law.
He said in an event where the mining companies dragged the Government to court, Government was ready to proceed and defend its position.
He said the legislative committee looking into the new tax regime in the mining sector had completed the draft report, which would soon be presented to Parliament for enactment.
And Dr Mulungushi told the committee that additional revenues expected as a result of the new measures was U.S.$415 million and the estimates were based on a projection of $3.2 per pound and annual production of about 600,000 metric tonnes.
Dr Mulungushi said the Government proposed that the revenues to be raised be set aside in a special account, which would also act as some form of stabilisation fund.
He said this was necessary in order to avoid serious macro-economic implications such as damage to the non-copper export sector as a result of exchange rate appreciation.
"Additionally, setting aside the revenues in a special account will smoothen expenditure because mineral revenues tend to be more volatile and uncertain than other revenue types," he said.
Dr Mulungushi said the resources in the special account would be utilised in accordance with the normal transparent procedures in consultation with Parliament.
Dr Mulungushi said the special account would be a permanent feature in which all mining revenues should be deposited and the amounts to be utilised in the annual Budget would be determined and agreed with Parliament.
Earlier, Dr Mulungushi asked the committee if it could allow his team to sit in camera, taking into consideration that the matter to be discussed was sensitive, critical and highly technical.
But Mr Beene said the committee allowed the media to cover the sitting as the issue being discussed had already been brought to the attention of the public by President Mwanawasa in his address to the House and Finance and National Planning Minister, Ng'andu Magande in the Budget.
Labels: DEVELOPMENT AGREEMENTS, JAMES MULUNGUSHI, MINES AND MINERALS ACT, WINDFALL TAX
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Minerals Act to be repealed
By Business Reporter
THE bill to repeal and replace the Minerals Exploration and Production Act of 1985 will be tabled in Parliament during the current quarter, Mines and Minerals Development minister Kalombo Mwansa has said. The repealing of the Act is part of the preparator process before the Government publishes invitations to interested companies wishing to bid for prospecting of oil and gas to determine the quantities and type in various areas.
Dr Mwansa said the repealing and replacement of the Act would provide for two separate licenses for prospecting and production of oil and gas. Dr Mwansa, who was speaking when he officiated at the national petroleum development seminar in Lusaka yesterday said the repeal and replacement of the Act would also provide for stronger legal provisions on environmental protection.
“The preparatory work also involves strengthening our institutional framework for regulating the oil and gas industry before inviting tenders from private petroleum exploration companies.
This work will be done in the first quarter of 2008 because the country is determined to benefit from the oil and gas industry, in the event that detailed petroleum exploration work produces positive results,”the minister said
Dr Mwansa also said the Government had made significant progress in the exploration for oil and gas in Northern, Eastern and Western provinces saying the results of the microbial analyses of samples collected from the provinces were very encouraging.
Soil samples collected from Kabompo, Chavuma and Zambezi districts proved positive for oil and gas for many of the places visited.
Out of the 11 samples collected in August 2005, nine tested positive for oil and two for gas. In a follow up study in July 2006, 31 soil samples were collected and 12 tested positive for oil while six for gas.
Dr Mwansa said the Geological Survey Department would this year extend the microbial survey to Kafue basin in Southern Province and the Bangweulu block in Luapula Province.
At the same meeting, Norwegian ambassador to Zambia Tore Gjos commended the Government for the decision to revise the petroleum Act of 1985.
Labels: MINERALS EXPLORATION AND PRODUCTION ACT 1985, MINES AND MINERALS ACT
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Govt to use CEE Act to empower Zambians
By Fridah Zinyama
Monday May 28, 2007 [04:00]
MINISTRY of Mines Permanent Secretary Leonard Nkhata has said government wants to use the citizens economic empowerment (CEE) Act to empower Zambians to invest in large-scale mining. Government has been trying to find ways in which to engage indigenous Zambians in the large-scale mining sector.
"To this end, we have been advising foreign investors coming into the country to form joint ventures with local investors," Nkhata said. "This move is meant to help empower local investors who do not have the capacity to embark on capital-intensive projects like copper and cobalt production."
Nkhata said the response had been good as some investors had shown enthusiasm and formed joint ventures with Zambians with licenses.
"Even our chiefs have entered into joint ventures with foreign investors," Nkhata said. "This move is better than indigenous people selling their mines and hence denying themselves a chance for economic empowerment."
He said in order to improve the general performance of the mining sector in the country; government was in the process of reviewing the Mines and Minerals Act.
Nkhata said the revised Act would help make the investment climate better, especially in the mining sector.
"We have realised that participation in the mining sector for indigenous people has been restricted to the small-scale mining," he noted. "We would like to see this situation change as our people become more empowered."
Nkhata said government also hoped to empower Zambians by implementing the Citizens Economic Empowerment Act. "We are hopeful that the CEE Act will increase Zambians participation in mining activities in the country," he said.
Nkhata explained that Zambian citizens would be able to access funds set aside for the empowerment process to invest in capital projects. And on value addition on mining products, Nkhata said his ministry was working hand in hand with the Ministry of Commerce.
"One area we hope to do so, is by establishing economic zones like Chambishi and Chilenje Economic Zones and coming up with policies that will create favourable incentives for investors," he said.
Nkhata said investors could assist Zambia add value to its products by accessing such zones.
"As a ministry, we were asked to do a study on what type of markets were available for value added Zambian products in the region," said Nkhata.
Labels: CEE, LEONARD NKHATA, MINES AND MINERALS ACT
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