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Empowerment Through Improved Natural Resources Management
13 November 2013
Hon. W. Chidhakwa-Minister of Mines and Mining Development
Pim Kraan- The Focal Point Raw Materials, Netherlands Ministry of Foreign Affairs
Mutuso Dhliwayo- Executive Director-Zimbabwe Environmental Law Association (ZELA)
Facilitator– Nigel Mugamu @SirNige
@SirNige asked Minister Chidhakwa on the challenges he has been facing in first few months in office and what he sees as some of the key issues to address in the mining sector
It has been an educative few months as I look at mining from a purely investment point of view as opposed to the geological view of the sector. The field of mining investment is competitive hence need for attracting investment.
We have not done enough to ascertain extent and value of our mineral resources. Thus while we know that we are rich in terms of our natural resources, we do not know how rich we are in terms of our platinum, gold, diamonds etc
The fact that we do not know our extant mineral resources means we cannot package our mineral wealth well in terms of attracting investors. You cannot package what you do not know and we simply do not have enough geological data.
We need to improve how we are documenting mining claims. We are suing antiquated technology to locate addresses of mining claims. We need to move to a GIS (incorporating GPS as a tool) system of locating mining claims addresses. We need to computerise claims, have a mining cadastre to root out corruption or double allocation as all claims will be computerised.
So the 3 key issues that need to be looked at in the Mines Ministry is; Improving Geological data, Computerising Claims and Packaging/marketing of our minerals to attract investors.
Another issue that we need to engage with, as a Ministry, is demystifying mining with respect to the perceptions on Artisanal Miners and mining being viewed as complex and preserve of a few elites. Artisanal miners mine up to 7tonnes of gold collectively and this represents a huge contribution to the local economy.
@gilbert_makore-Minister Chidhakwa conveying a very investor centric view of mining
@SirNige asks Mutuso Dhliwayo of the Zimbabwe Environmental Law Association what the concerns of civic organisations are in terms of natural resource exploitation and governance?
The country has a large mineral resource base (significant known reserves of platinum, chromite and diamonds) and this should be used to catalyse Zim’s industrialisation. The concern within civil society is on how government is negotiating mining deals. The Minister has pointed out that we do not know the extent and value of our minerals. The question is how we are negotiating mining deals with foreign private investors when we do not know what we are selling. Why has it been difficult to update our geological data? Transparency and accountability in mining is a concern that even the President has raised. There is a need to ensure that we address secrecy in the mining sector in terms of the deals or contracts that have been signed and the revenues accruing from the mines.
Questions from the floor
What kind of support can be given to artisanal small scale miners to ensure their safety and to make the jobs they create decent? Are we looking at supporting small scale miners at the expense of big mining companies that provide decent jobs?
What is the Minister doing to address the issue of secrecy and opacity in the mining sector?
Answers from Minister Chidhakwa
Ministry is not looking at supporting artisanal miners at expense of big mining corporates or vice versa, both small scale miners and big miners need to interface with gvt and other stakeholders. However, looking at the contribution small scale miners make there is need to ensure that they are supported in terms of safety, finance, marketing etc.
One way of improving safety for small scale miners is to improve mechanisation and support services. To this end, the Ministry of Mines will put in place 8 service centres in provinces to provide milling services for small miners.
The main revenue heads from mining are royalties, corporate income tax and dividends. However, the impact of diamond revenues has not been felt by ordinary Zimbabweans. There are obviously huge expectations but this has to be tampered by realisation that a large percentage of alluvial diamonds in Zimbabwe are industrial with a few being near gem and gem quality. Industrial diamonds fetch the lowest prices/carat when compared to near gem and gem quality.
To improve the proceeds from diamond mining companies, the Ministry of Mines is talking to diamond miners to encourage them to do underground mining of kimberlites as focusing on alluvial diamonds in some way sterilises the resource in the sense that you are not harvesting the full resource and are in some ways just taking what is on top and is easy and cheap to get. There is, therefore, need to invest in underground diamond mining.
I know that there are serious opportunities for corruption in the mining sector and in mining processes. I understood that there is corruption not from having being told or seeing it but from having someone try to bribe me. What is important is to ensure that the economy grows and with that individual incomes grow. I know there is opacity and I am committed to accounting for every diamond.
Mining can have a positive catalytic effect on the economy if we set our minds to it. I have set my mind on ensuring that mining in Zimbabwe catalyses development and industrialisation. To do this Mining cannot be end in itself, there must be beneficiation. We need to have platinum refineries in the country.
Remarks from Mutuso Dhliwayo
People have huge expectations that have not been met in terms of benefiting from mining. There are also serious concerns on opacity. Without information on diamond mining operations we are left to speculate. The public mistrust stems from the fact that government is not making public information related to mining operations and the revenue from the mining operations.
No one is against indigenisation in mining. There is general consensus that local communities must have some direct benefit from mineral resources found in their areas as they bear most of the environmental, social and economic costs of mining. This is similar to the Communal Areas Management Programme for Indigenous Resources. The challenge is how the programme is being implemented. We are concerned that the programme is now partisan and seems to be political. There are community trusts that are said to have received millions yet some local community members say they are reading about the community trusts in the newspapers. There are concerns in terms of how they are structured and or constituted
@TitusGwemende-Minister Chidhakwa is short, eloquent and to the point. He seems to have a grasp of the issues.
@SirNige asks Pim Kraan- what r some of the hurdles we should look out for in the exploiting our natural resources?
There is need to look at mining companies’ licence to operate. How do the companies engage with workers and local communities? There is need to also look at end consumer of mineral resource based products such as electronics and jewellery as this could be a point of leverage in terms of reforming mining governance. Ingredients for developing the extractive Industry in Zimbabwe: governance, functional property rights, transparency and law enforcement.
Questions from the Floor
The Ministry of Environment stated that mining around Mazowe river should stop yet some of the companies there are fully licenced. What is the comment of the Minister of Mines?
There are delays in terms of processing visas for potential investors. What is the Ministry’s view or comment given that the Minister is interested in promoting mining investment?
We are just hearing about community share ownership trusts. Where do we go to register to be part of these and are they meant to benefit everyone?
Why are we not cutting and polishing diamonds in the country? And why are there diamond companies that have established schools to train Zimbabweans on cutting and polishing but yet charge prohibitive fees to go to the schools?
Why do we have joint ventures for alluvial diamond mining when we can go it alone?
What are we doing to ensure that the current mineral wealth benefits coming generations long after we exhaust the mineral resources?
If investors refusal to implement proposal to establish refineries, what will the Ministry do?
Answers from Minister Chidhakwa
The Law does not allow anyone to mine less than 30mtrs from riverbed. Miners should comply with environmental laws. We need to promote mining investment but it has to be responsible. We need to protect our rivers.
Having worked for the Zimbabwe Investment Authority, I interacted with Immigration and I know that there may be serious challenges with visa processing for investors. We need to improve efficiency to ensure that the time it takes to engage investors is streamlined.
We have more than 15 diamond cutting and polishing firms in Zimbabwe and all of them are not working as they lack access to Marange diamonds. There is actually a fee that is paid if you want to cut and polish locally. However, if you want to cut and polish outside Zimbabwe, that fee is waived. We need to address this. We need to look at policies to promote beneficiation through supporting local diamond cutting and polishing firms.
The idea of community share trusts is to institute corporate social responsibility. There is no place to register as the benefits should be seen and felt through improved local infrastructure and local income generating projects.
Principles for drafting law for a Sovereign Wealth Fund are being looked at and will be put to Parliament shortly. The idea is to put aside money not to fund our current expenditure but to save for the future expenditure of coming generations.
Transnational mining companies are not interested in setting up refineries in every country they operate. That is why they are transnational. They are interested in centralised procurement, refining, research and development; and human resource training. We, therefore, need to fight for our national interest to add value to our minerals in face of resistance by companies.
@gilbert_makore Min. Chidhakwa has conviction. Lets see real progress in terms of execution.
Closing remarks by Mutuso
We need to reform the criminal 1961 Mines n Minerals Act. We cannot talk about value addition; and transparency and accountability when these issues are not in our laws and policies.
Minister Chidhakwa closing remarks
The Mines and Minerals Act and Precious Stones Trade Act will be reformed. Principles for these laws will be put to Parliament before year end. I want to challenge the audience to contribute to making Zimbabwe beautiful and great. Let us be a generation that stands for something. We have fought in the past and may fight in some instances in the future but we need to rebuild relationships and the somewhat frayed partnerships on win-win basis. Let us have partnerships that are good for Zimbabweans and good for everyone else.
Pim Kraan- Zimbabwe needs long term vision on mining to attract the much needed investments. That requires trust building.