‘Plug leakages to achieve US$12bn mining economy’

Mining is a crucial part of Zimbabwe’s economy making up over 60% of annual foreign currency receipts and 13% of gross domestic product.

Last year, the government unveiled a policy document outlining how the country plans on turning the mining sector into a US$12bn economy by 2023.

Our Senior Reporter Anesu Masamvu (AM) engaged the Chairperson of the Parliamentary Portfolio Committee on Mines and Mining Development who is also Shurugwi South Member of Parliament Edmond Mkaratigwa (EM) on these and other issues. Find excerpts below

AM: Zimbabwe has set a target to have a US$12bn mining economy by the end of year, 2023. We are in 2023 and as Parliament, is the country on course to achieve this which has been described by critics as ambitious?

EM: The foundation has been laid through the National Development Strategy 1 (NDS1) as pronounced by His Excellency the President (Emmerson Mnangagwa) and I must say it was hinged on opening of new mines, opening Zimbabwe for business and promotion of ease of doing business. We encouraged investors to come into the mining sector and the strategy was also premised on reopening of closed mines and in the past four or so years, there have been a lot of development, a lot of investment and I’m glad to say the 2021 results have actually confirmed this because the revenue that has been generated in this sector has gone beyond US$7bn which is a positive indicator that the US$12bn can actually be achieved or surpassed.

If I can break it down to the minerals that are responsible for the attainment of that target, the gold sector for example we have this year been able to do more than 30 tonnes of gold which is a significant achievement towards the attainment of the US$4bn earmarked to be a contribution from the gold sector. The diamond sector we expect at least a billion and I have no doubt results on the ground are confirming the possibility of that. We have a lot of other minerals and some new minerals which probably in terms of our budget focus we didn’t expect much but they’re going to come on board and they’re going to assist us in attaining the US$12bn target. We have our platinum, chrome and other resources they are going to contribute.

So yes, I’m happy we’re on course in terms of our trajectory to attain the US$12bn targets by the end of 2023.

AM: We have seen the coming in of lithium which has attracted investors. How is it going to contribute to the set target?

EM: I’m glad Zimbabwe is one of the largest owners of the lithium mineral resource. The advent of the electric vehicles and autonomous vehicles which places a huge demand on batteries that are made from lithium. This demand will actually see us being able to benefit immensely from our lithium. However, I think you have seen developments in December which are in a way meant to actually install order in the lithium sector and ensure that we lay the foundation for takeoff, we avoid challenges or mistakes that have not benefited the country from export of raw minerals and as you know the central bank is also involved in trying to ensure that we use our minerals to leverage and hedge an initiative that is supported by the new policy whereby we’re saying no export of raw lithium and that will open up flood gates for investors to come and support industrialisation in-order to process the lithium locally and create that value addition that will add on to our fiscus. What it also means is that we’re going to enjoy as a country the manufacturing of batteries and associated linkages that will empower our own community.

However, locals also want to participate in the actual extraction of lithium and if we’re going to create industries, it means the market is coming to the doorstep of those artisanal or small-scale miners. That will reduce the logistics and transport cost and ensure that they have got access to those items from local markets whilst at the same time they stand to benefit from the products that are going to be derived from the value addition of the lithium.

AM: Speaking of investors we know that over six Chinese gold companies have made multi- million dollar investments in Zimbabwe lithium mines taking about 37% of the US$12n target. How important is China in terms of partnering with Zimbabwe in the mineral sector and what do they bring towards attaining the set targets? 

EM: When we look at the history of China and Zimbabwe, China is our all-weather friend, not fair weather but all-weather friends. When you look at mining as a sector, it’s capital intensive. It requires the right skills.

It requires tooling with the appropriate technologies that will enable mass extraction in order to reach our US$$12bn target. It must be backed by the productivity and when you look at the geo-politics of this world, I must say in a way it is evidence that it retards a lot of developments for our country unfortunately due to some perhaps legacy issues and developments but I must say that then demonstrates that China is already with us and it is going to support us in terms of retooling our mining sector and ensuring that production is going to increase. I know of course there can be perceptions that China is going to disadvantage us by the feeling that maybe we’re mortgaging our minerals but I want us to look at it with an open mind.

Zimbabwe has got the mineral resources and has opened the business space. There are no limitations in terms of investors that must come to Zimbabwe and exploit the minerals and China has been forthcoming without any interference or restrictions regardless of the fact that they may be restrictive measures that have been imposed on the country.

We see Chinese investors coming to bridge that gap and when they come in, it’s not like they come and pick the minerals. They invest money, they are coming in with equipment and skills that are needed for one to actually justify a business case. And a business case by the way is about profits but the policies that you were talking about will ensure that as a business, never mind that they are Chinese or any other nationality.

As they go about making their profit they’re properly taxed and there is revenue that is going to trickle into our national fiscus thereby growing our GDP and becoming an enabler for us to actually articulate and stabilise our microeconomic fundamentals.

AM:  Honourable, you speak about these targets to the US$12bn mining economy but some would say you’re operating on auto-pilot without proper laws considering suggestions that the previous mining act is archaic and there is nothing that is on the table as of now. Where are you as a committee in terms of finalizing the Mines and Minerals Amendment Bill?

EM: First of all, I want to say I agree with you we’re are operating with an old and archaic Mines and Mineral Act which was established way back in 1961 but when you interface with stakeholders you will find various opinions. For example, the Pegasus Association who are critical in this country in terms of exploration and in terms of pegging those mining blocks, their argument is that we don’t need to change that Act.

It is very effective as it is. What we need to look at and address is the implementation of the Act. However perhaps representing a certain cluster of stakeholders they may be personal or call it selfish in nature but you should listen.

There are some reasons from what they’re saying. But if we’re to look at the Mines and Mineral Amendment Bill, the first time it went through Parliament, our President could not assent it citing issues to do with the inclusion or involvement of the vulnerable groups like women and the youths, citing issues to do with conflicts between farmers and miners in terms of land use and these are issues that needs to be addressed through the policy.

When we go back to the 1960s obviously there were very few investors or people involved in mining and most of our locals were mainly interested in other activities and prominence was probably given to the agricultural sector but in terms of those that enacted the law they made sure the mining Act would be biased towards empowering the miners. The miner has got better rights.

I must now move on to your question, I just wanted to address the background.

The Mines and Minerals Amendment Bill has received the best attention so far in terms of the crafting, the drafting and consultations but we’re at the pre-bill stage.

We had workshops that took us to Kariba, to Mutare and we made resolutions. We worked with the Ministry of Mines, the Attorney General’s office and other stakeholders like Civil Society Organization and I’m glad to say as we speak that has been finalized the Attorney General’s office submitted a complete draft of the Mines and Mineral Amendment Bill to Parliament and the Parliament then took it to the government printers for proofs and I’m happy proofs are almost complete. This is the stage where we are and I must call it the last mile in terms of the pre-bill stage.

What remains now is for the minister to bring the bill to the parliament and once it’s submitted to parliament then it should come to the committee and we hold public consultations, and by the way I mentioned resolutions that we made and some of the resolutions had everything to do with stakeholders conference and I’m still of the view that we should have that conference as part of the public consultations and we may actually need to split it into two the southern and northern region so that we are all encompassing we don’t need any area behind.

After that we must go to the mining centres we must go to the communities within the jurisdictions of the different mining houses different minerals that are being extracted within their vicinity and be able to consult them publicly and after that as a portfolio committee then come up with recommendations that we will present to the Executive to then finalise and table the Bill before His Excellency and I’m happy to say we’re rejuvenated it was proving to be a pie in the sky but right now we have a Bill to work on.

One area is we have tried to advocate in this coming Mines and Mineral Bill inclusion of principles to do with Community Social Responsibilities (CSR) because CSR is not as mandated by any law it’s not compulsory but we’re hoping will have some kind of soft law that will then assist us in our oversight role to actually try and hold the Executive to account in as far as ensuring that the mining cooperates really plough back to the communities in a very definitive and significant way.

AM: There is a special group of artisanal miners. What is their role in achieving this US$12 billion target? Do the policies that are in place currently cushion them to make this reality?

EM: The artisanal and small scale miners are a group that plays a significant role in terms of contributing to the attainment of the minerals target in terms of where they’re involved.

For instance, in the gold sector for a long time we have been having a contribution of artisanal and small scale miners exceeding 60%. When we talk of gold production in this country, the bulk of it is not coming from large or medium scale miners, it’s coming from artisanal or small scale miners.

So as a government I can only endeavour to lobby and ensure that we recognise their efforts by incentivising this sector. How? We need loans funding that are tailor made to ensure that we capacitate them.

It is time we mechanize this sector. It’s time we give them access to the financial resources that are needed and by the way when they mine nine times out of 10 they do it without proper exploration carried out. This is an area I urge all stakeholders with the government taking the lead to ensure that exploration is competently, expeditiously prioritized and perhaps funded by the government for the small-scale miners. Nine out 10 times, they waste a lot of energy or resources trying to mine when they’re missing the actual location.

Imagine having contributed more than 60 %. lf there were channelling it to a known resource area all of them, we could triple the output of artisanal and small scale miners so they need to be capacitated and they need to be equipped.

AM: Who equips small scale miners who is responsible for that?

EM: The government must come up with incentives. What it means is the national fiscus should create a stimulus package to retool and equip this sector. All I’m saying is they must have access to funding for the purpose of tooling and it’s easy if we back it with exploration. Even our known local banks could actually partner the government in coming up with funding to capacitate artisanal mining.

I wanted to speak about the vulnerability of this sector again. Like anyone else chasing money or pursuing profits, they tend to cut corners a lot. So we also need to invest in training and safety and perhaps the reaction equipment in terms of accidents and we must be able to ensure we register them, organise them and we give them training in order to ensure that they adhere to minimum safety standards and preserve life.

AM: As we conclude, we’re in our final lap as we chase this target. As the chair of the Mines committee, what would you want to see becoming a reality as we move towards 2023 and the end of the year so that we can say by December that we have finally met this target?

EM: First thing first. I want to see the enactment of the Mines and Minerals Bill. In other words, I want to see it become law. That’s my number one priority because it’s an anchor to all other mining laws and it means we can then also speak to other mining laws governing other minerals like your diamonds and so on.

Priority number two now speaks to the implementation of that law and strengthening of other laws to seriously create enablers that will see those in the mining sector going about their business with minimum distraction.

Small scale, medium and large scale miners must be incentivized and motivated to push for production. That can only be achieved through dialogue with them. We have had a lot of dialogues with them and one major area of concern is the issue of retention.

As a government we survive on taxes but as a give or take to stimulate this sector we also need to ensure that they return a comfortable percentage of the exports.

AM: So are you confident enough if you’re back in parliament that you will be proud to say i was part of the team that helped to meet the target? 

EM: I’m very much confident and I still want to continue to be in Parliament so that I see through all what has been laid down.

So yes I’m going to work very hard in terms of adding my voice to the enablers of the attainment of that target and I will continue to be an advocate of the general populace.

In terms of how they partner the government to ensure that. When you partner government, you’re also partnering the communities and accountability and transparency are the packages that goes around with everything and like what His Excellency is always saying we should shun corruption for all this to happen.

This is why l was saying the law enforcement agents should also assist in making sure we plug any leakages that may actually impede us from getting to where we want to be.