LIVINGSTONE MARUFU
Zimbabwe’s mining companies have expressed concern over the inconsistency in government’s policy pronouncement saying it is hurting the multi-billion dollar sector.
Such contradictions and inconsistencies have resulted in more than 80% of the miners remaining pessimistic about the prospects for a predictable operating policy environment, according to the 2020 state of the mining industry survey report, launched last week.
This is despite President Emmerson Mnangagwa assuring business that policy inconsistencies were now a thing of the past.
Players in the mining sector, which accounts for more than 60% of the country’s export receipts and about 20% of the gross domestic product, indicated that it is this policy inconsistency among other factors that has led to a plunge in investors’ confidence.
Some miners have often accused the government of preferential application of the mining laws and policies.
They also claim that most of those earmarked to lose their mining claims under the use it or lose it policy were those that were believed to be perceived enemies of the state.
They said there is, therefore, urgent need to address this inconsistency.
“The cited misalignment in foreign exchange and the fiscal framework, liquidation of unutilised nostro balances, and multiple taxes continue to weigh down mining operations in 2021,” the report said.
Mining executives said political and country risk remained in the negative territory for 2021.
They said there was an urgent need for authorities to do more to improve the situation.
Mining companies said the government made a preferential treatment to small scale miners who get 100% forex retention against 70% which large scale miners get.
However, the big mining houses pay statutory obligations at 100% forex.
The mining survey findings also showed that mining executives were also slightly less confident about economic prospects for 2021.
About 60% of respondents expect the economy to shrink in 2021, while 20% anticipate the economy to be the same as in 2020.
Approximately 20% of the respondents indicated that the economy would grow in 2021.
The 2020 survey findings show that mining executives respondents were skeptical about the implementation of the use it or lose it principle highlighting that it has somewhat brought uncertainty around security of title.
Miners are also slightly less confident about prospects for a consistent and predictable operating policy environment for the mining sector in 2021 with about 80% of respondents expressing pessimism on the mining policy environment for 2021.
The respondents cited frequent policy reversals that characterised the mining operating environment in the greater part of 2020.
