eBusiness Weekly
For a resource rich country such as Zimbabwe, mining is an obvious way to quickly move the country forward economically and create a large number of skilled jobs that pay reasonably well.
Apart from petroleum resources, the ancient craton, plus the intrusions of the last few billion years, that underlies most of Zimbabwe contains deposits of most minerals and many of these are in commercially exploitable quantities.
While low-value high-bulk minerals like coal and iron ore are difficult to export to world markets since competition from those with these resource near a sea coast is high, they can be used to build industry locally. High-value low-bulk minerals, like many found in Zimbabwe, can be exported easily and, we hope the final processing is done within Zimbabwe to cut back on transport costs and increase the value and jobs for the country.
But to get maximum benefit from the resources, Zimbabwe has to think carefully how it can attract serious investors.
Obviously the country has some requirements, just as major mining investors have their requirements, but some of these overlap in certain areas. So long as everyone is reasonable, it is not difficult and certainly not impossible to match these.
To begin with, investors like a stable peaceful country with reasonable infrastructure. Well Zimbabweans really want that too. So that first requirement from both sides should be easy to meet.
Secondly, Zimbabwe wants mining to be done properly. Miners need not pollute rivers and create waste that erodes everywhere and silts every dam. Out rules are not onerous and in any case are best practice. For some it is just proper mining engineering; other elements, like the research we have already done, on what trees, shrubs and grasses should grow on mine dumps and convert them in a couple of decades into self-replenishing woodlands need to be better packaged.
Thirdly, mines need to be safe. We assume no responsible mine, or even an irresponsible one wants to have a reputation for ignoring the safety and health of its workers. Again our rules are simply best practiced rather than being esoteric, and perhaps just need to be simply packaged.
Fourthly, mining is a notoriously labour-intensive industry and Zimbabwe wants jobs. Again this is not a problem for investors. Established large mining companies, including those owned by external shareholders, have found that Zimbabwe has both a good skills base and good educational and training infrastructure, and are prepared to expand these if necessary. Again there is alignment. The investor would rather recruit locally since there are no moving costs, home leave and a lot of other expenses when using expatriates. Minimum wage rates for both unskilled and skilled labour are laid down in an industry-wide agreement, with an appeals process built in. But in any case Zimbabwe does not overcharge.
Fifthly, miners have to pay taxes. This is a conflict that occurs everywhere. Producers always want lower taxes and Governments would like to get the maximum return. But all Zimbabwe has to do is to ensure its tax structure is easy to follow and that effective rates fall within the boundaries that other states charge.
Finally, Zimbabwe would really like miners to think seriously about processing as much as possible within the country. We are reviving some of our past refineries, we offer tax concessions to those ready to invest in processing and we encourage investors to combine in building refineries that can produce economies of scale. Here we should do more to make it ever easier, and attractive, for the miner to export metal rather than ore or just initially processed mineral. Compulsory law might not be the most competitive solution, but other solutions that produce win-win results must be explored and pursued.
We also need to package research, requirements and regulations better, and pursue an approach that stresses goals rather than details. No investor should have to plough through the century-old archives of a score of journals to get an idea of Zimbabwe’s geology. The consolidated fruits of that research, frequently updated, should be readily available in one place. Regulations can have default solutions that work, but also invite proposals that meet the same goals. To take just one example, mine dumps. We need to set a goal that waste should not poison a river or devastate a district. We can give example of things that work, but we can tell an investor if his engineers come up with something that achieves the same result he can go ahead.
Zimbabwe is not unique. Other countries have the same minerals. So investors are looking for the best country. If we are stable, maintain decent education, show we can be organised when it comes to presenting our research and regulations, and that these regulations are clearly goal-orientated rather than being petty rules to keep bureaucrats employed, we can compete with the best and derive maximum benefit in jobs and wealth from our resources.
