TINASHE MAKICHI
Government has started processes of partially privatising the Zimbabwe Mining Development Corporation (ZMDC) as it seeks to improve the State-owned mining arm’s operational efficiencies, Business Times has learnt.
ZMDC is a state mining vehicle established by an Act of Parliament to create a vibrant and versatile mining power house necessary to transform Zimbabwe’s mineral wealth to world-class standards.
The current efforts by the government come as the State mining arm’s working capital position continues to deteriorate while there is uncertainty on its ability to continue as a going concern.
“Partial privatisation of ZMDC is underway. By the second quarter of 2019, the mining concessions were granted for platinum, lithium, coal bed methane (CBM) and gold, among others,” said Finance and Economic Development Ministry in an internal update seen by Business Times.
While the mining group’s condition continues to deteriorate, ZMDC has rich mining assets across the country.
Recently the company registered a grand entrance in the platinum mining sector Great Dyke Investments Limited.
Since formation ZMDC has faced challenges which affected its viability and the capacity to significantly contribute to the economy.
Some of the challenges have proven to be beyond the company’s control especially the indigenisation and economic empowerment legislation.
ZMDC once owned 100% shareholding in Marange Resources and since 2005 the mining group has entered into joint venture agreements with international companies.
The State-owned investment arm also owns Sabi Gold Mine, Jena Gold Mines and Elvington Gold Mine while it also holds approximately 26,000 hectares of platinum claims in the Hartley and Shurugwi chambers of the Great Dyke.
ZMDC also has a significant interest in graphite mining, emeralds among other minerals, but most of the mining group’s mines across the country have remained idle for years.
ZMDC was established in 1982.
In his 2020 National Budget, Finance minister Mthuli Ncube said the government is implementing a comprehensive programme to reform state enterprises and parastatals to address weak governance and other operational and capitalisation related challenges.
“…the 2020 Budget should fast track the implementation of PE [public enterprise] reforms while enforcing the provisions and regulations of the Public Entities Corporate Governance Act and making the necessary adjustments to all administered prices to ensure cost recovery,” Ncube said.
