‘Honeymoon over for mining speculators’

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Minister Winston Chitando

Golden Sibanda
It was good while it lasted, but Government will have none of it, not anymore.

The honeymoon is over for speculators on mining ground. And it had to happen; mining is strategic to Zimbabwe’s economy.

At least, this is in no way new, but simply enforcement of law that already existed and was not being adhered to, according to Mines and Mining Development Minister Winston Chitando.

The Government has warned that it would now strictly require everyone holding precious mining title to fully exploit the ground or risk it being forfeited.

If not addressed, new investors seeking to enter Zimbabwe’s well endowed mining sector may not find anymore free ground to explore or exploit.

Mining a strategic sector

It did not matter to speculators mining accounts for a weighty 12-16 percent of Zimbabwe’s Gross Domestic (GDP) and needed to be optimally exploited.

Further, the fact 60 percent of foreign exchange earnings come from minerals means it needs no rocket scientist to understand Government’s frustration.

Government has designated mining as anchor of short to medium term growth. With this understanding, Government has previously threatened drastic action on the speculators, but still the culprits would not heed its calls.

Minister Chitando recently said that Government would repossess all mining land that is not being developed.

“Protection of precious mining title shall now be based on work or capital expenditure not payment as is the case now.

“Effective January 2019, we shall strictly enforce the law on precious mining title,” he said.

“As a ministry, we should admit we have not been strictly observing the law,” he said.

“Instead of protection by production, we have been doing it by payment. This, (protection by work or capital investment), is not new policy, but a provision in our legislation we are simply going to strictly enforce,” he added.

The new provision will be enforced without favour beginning January 2018.

Use it or lose it; it’s a new era

Gone is the era, the minister said, when holders of land title for mining ground kept a stranglehold on mining title by merely paying rentals.

Going forward, Minister Chitando said mining houses or holders of mining title will only be able to keep them if they mine or invest significantly in projects.

He said the ‘use it or lose it’ policy for the mining sector had not been adhered to or enforced, allowing speculators to hold land by only paying ground rentals.

As a result, huge tracts of mineral rich ground continued to lie idle, which might present challenges at a time there is new and frenzied interest in mining by investors.

This has been on the back of growing confidence since the advent of the new dispensation late last year, which is pro-business and investment.

Since that landmark development, which investors for long craved, more than $11 billion has been committed in investments into Zimbabwe, mostly in the mining sector.

These commitments include one by Cypriot firm Karo Resources, which pledged to develop a $4,2 billion platinum mine in Mhondoro Ngezi, along the Great Dyke.

The Government early this month signed a memorandum of agreement with Sinosteel Corporation for the development of coalbed methane (CBM) 400 megawatt (MW) plant at a cost of $1 billion.

Minister Chitando says Zimbabwe is exploiting only 10 out of 60 minerals found in the country, which is considered generally under explored.

Govt not reinventing the wheel

Already, Government had started flexing its muscles on this long-standing practice, pouncing on the country’s largest platinum miner, Zimplats.

The Government has given notice to repossess 27 948 hectares of platinum group metals (PGMs) rich ground. It argues the miner hold enough ground to last over 50 years.

The reasoning, which maybe blamed on lack of foresight by Government in the years gone by, which now appears like or interpreted by some as disrespect for property rights, is that culprits have no plans to exploit the land in the near future.

A similar exercise to repossess all precious mining title or mining ground not being utilised had also been initiated with regard to chrome rich but idle ground, held by Zimasco and ZimAllows, which held 50 percent of the chrome rich ground.

Recent reports also claimed Nigerian billionaire, Aliko Dangote, failed to secure coal deposits, which would also serve the Dangote Group’s operations in Zimbia.

While Matabeleland North Province has good reserves of near surface coal that is easy to mine, the major fields have already been claimed while some are being exploited, leaving little or nothing for newcomers.

Mining is not for ever

With rapid changes in technology across the world, Zimbabwe needs to optimise exploitation of minerals to fund development and develop new industries.

Alternatives have been found for minerals such as iron, diamonds, nickel and platinum. It is a matter of time before the rapid advancement in technology renders some minerals useless or out-rightly banned: coal is one, over environmental issues.

Asbestos is also a case in point, and certain parts of the western countries, especially the United States, have banned use of chrysotile asbestos.

Researchers in these countries claim they discovered that traces of the mineral were found in patients suffering from lung cancer. But countries like Zimbabwe dispute the claim, saying asbestos is safe if it is used properly.

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