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Mukasiri Sibanda's Blog

articles on mineral resource governance

Getting a mine in Zimbabwe: How to get started

Analysis of Zimplats 2017 Integrated Annual Report: 11 Things That CSOs Can learn

  • Zimplats is domiciled in Guernsey, a tax haven
  • Zombie data, Zimplats’ $86 million payment to government institutions in form of corporate income tax, additional profit tax, pay as you earn, royalties, withholding tax and customs duty cannot be used effectively for accountability
  • PWYP Australia’s call for mandatory disclosure for all mining companies listed at the Australian stock exchange deserve the support of resource rich but information starved Zimbabweans.
  • Women constitute 7% of Zimplats’ total permanent employees
  • Stylised fact: Zimplats does not declare other minerals except for platinum
  • Zimplats’ mining agreement is expiring in August 2018, CSOs must call for transparency in contract negotiation including scrapping off the harmful 2.5% royalty stabilisation agreement

There are strong allegations against proponents of the transparency agenda, there is “a wealthy of information and poverty of attention.” To dispel this strong notion, CSOs especially the Publish What You Pay (PWYP) campaign in Zimbabwe must make use disclosed data like Zimplats’ 2017 integrated annual report for evidence based transparency and accountability advocacy. Already, a research paper produced by USAID’s Strategic Economic Research Analysis (SERA) program in 2016, “Gap Analysis of Mineral Revenue Disclosure and The Information Needs of Various Stakeholders” cautions CSOs to back their transparency appetite with ability to consume data already in public domain.

 Personally, I feel challenged as a PWYP data extractor and also working for a lead organisation on mineral resource governance, ZELA, to showcase the linkages between transparency and accountability.  More so, the fact that Zimplats is publicly inviting stakeholders with queries or comments concerning their integrated report to address them to info@zimplats.com or stewart.mangoma@zimplats.com is an opportunity that cannot be missed by transparency activists.

Below are 11 things that CSOs can learn from Zimplats’ 2017 integrated annual report;

Zimplats is domiciled or registered in a tax haven

Tax havens, generally, are secretive tax free or low tax jurisdictions notoriously known for helping companies to avoid paying a fair share of taxes to countries they are generating their wealth from. Zimplats is domiciled in Guernsey, a tax haven. Panama Papers revealed that tax havens facilitate nefarious activities like corruption and tax evasion which erodes the finance muscle of resource rich countries to build better schools and clinics. PWYP campaign in Zimbabwe must have push for a public register of all companies operating in Zimbabwe that are domiciled in tax havens that can be used by tax collectors to profile exposure to illicit financial flows risks.

Disclosure by listed companies a silver lining but more needs to be done

In an environment where limited access to information is a major cause of concern, publicly listed entities which raises their capital through the stock exchange are compelled to publicly disclose consistently their operational and financial performance data.  Even if a mining company like Zimplats private limited is not publicly listed in Zimbabwe, courtesy of its parent company Zimplats holdings limited, listed at the Australian stock exchange (ASX), information disclosure is still mandatory. Hence the reason why Zimbabweans just like any interested party in this world have access to Zimplats information disclosed courtesy of ASX. Another route to Zimplats’ data is through Zimplats Holdings limited’ largest shareholder, Impala Platinum Holdings, a South African based company that is listed at the Johannesburg stock exchange (JSE) which owns 87% of Zimplats holdings.

Noting the transparency deficits in the mining sector, it is creditable that the Mines and Minerals Amendment Bill provides for mandatory listing of all mining entities at the Zimbabwe stock exchange (ZSE). If successful, this will transform the disclosure landscape in the mining sector. Although more still needs to be done like mandatory public disclosure of payments made to government institutions by mining companies or projects. Canada, EU and USA have embraced such mandatory disclosure practices for listed companies. As a result, disclosure of payments made to government by Unki mine and Blanket mine, have been made possible because of Anglo-American and Caledonia’s listing at London Stock Exchange (LSE) and Toronto Stock Exchange (TSE) respectively. Therefore, a call by PWYP Australia for mandatory disclosure of payments made to government institution for all ASX listed extractive companies deserve the support of all resource rich but information starved citizens. The second point below helps to shed more light on the value of mandatory disclosure of payments made to government institutions.

Stylised fact: Zimplats does not declare other minerals it produces except for platinum

 Platinum mining companies are commonly accused of only declaring platinum and for being silent on other minerals they are producing. Zimplats’ report is quite clear that the mine generates revenue from the sale of Platinum Group of Metals (PGMs) and other minerals like gold, silver, nickel, copper and cobalt. PGMs comprise of platinum, palladium, rhodium, iridium, ruthenium and osmium.

Zimplats summerised financial results

The main reason why platinum is the reference point to Zimplats’ mineral production is that it contributes over 50% to overall revenue generated from mineral sales.

$86 million paid to government institutions in 2017 financial year, is it Zombie data or what?

Payments made to government have been lumped up. $86 million was paid to government institutions in from 1 July 2016 to 30 June 2017. The payments were made in respect of Corporate Income Tax (CIT), Additional Profits Tax (APT), Pay As You Earn (PAYE), withholding tax and custom duty. To Zimplats’ host communities of Mhondoro-Ngezi and Chegutu rural districts, disclosure of lumped up data on payments made to government institutions is Zombie data. It is not possible for them to track how much was paid to their local government to finance local economic and social development. This is not the case with Caledonia’s 2016 ESTMA report which discloses how much was paid to various government institutions including local government.

Disclosure of payments made to Ministry of Mines will help to hold to account the Ministry on the overdue implementation of the mining cadastre which requires roughly $2.5 million.

Ministry of Mines has one vehicle

Certainly, following the money paid to Ministry of Mines by mining companies is critical to enhance accountability of service delivery in the mining sector. Of course, Ministry of Mines must remit the funds it receives from the mining sector to the treasury.

Government also must disclose various revenue streams from mining companies

Revenue transparency is not only the responsibility of mining companies, government must also disclose various revenue streams from mining companies. Interestingly, the 2013 National budget statement disclosed disaggregated data of Zimplats contribution to the fiscus from 2009 to 2012.

Zimplats contribution to the fiscus 2009 to 2013.PNG

However, this is an isolated case of budget mineral revenue transparency disclosure. Hence, “Now you see it, now you don’t: Budget transparency and volatility problem” argued by International Budget Partnership (IBP) is clearly evident in Zimbabwe. It is important for Zimbabwe to adopt or adapt best practice such as the Extractive Industry Transparency Initiative (EITI) to solve such challenges.

Shareholders got a 1% share of $5,3 billion cash utilisation from 2002 to 2017

Zimplats $5.3 Billion

Out of $5,3 billion generated for 15 years, shareholders got a 1% share amounting to $67 million. Suppose that the community had a 10% equity in Zimplats as per the indigenisation thrust, the share of dividend revenue will be a shrill 0.01% of $5,3 billion, the other 0,01% accruing to Employee Share Ownership Trust (ESOT) and the remainder 0,08% accruing to 80% shareholders in Zimplats private limited. Clearly, the equity route may not have a transformational role in financing community development programmes. The fact that shareholders got a share of 1% from $5,3 billion generated over 15 years raises the fears that they could be gaining elsewhere through misuse of transfer pricing.

Corporate social investments

Further to contributing taxes to finance development, Zimplats voluntary undertakes Corporate Social Investments (CSIs) to develop communities near mining activities.

Zimplats CSI 2017

The disclosure of CSIs presents an opportunity for communities to carry out social audits to verify whether disclosed expenditure is matched with benefits on the ground. It would be interesting to compare CSIs with taxes paid to local governments, Chegutu and Mhondoro-Ngezi Rural District Councils (RDCs). This is important to check if Zimplats prefers to invest more through CSIs than to pay a fair share of taxes to finance local economic and social development.

Women left behind on employment opportunities

Women are not getting a fair share of employment opportunities from mining activities. Out of 3,065 people permanently employed by Zimplats, only 215 are women, a 7% share of employment opportunities. This is a major cause of concern and it must be transparency concerning how Zimplats is addressing this issue to allow community monitoring on progress. The Zimplats board and management are male dominated, with one women representation at management and board level. Zimplats has 9 board members and 8 members in the executive management structure.

Employees by gender
Female    215
Males 2,850
Total 3,065

 Employee by gender

Business risks and stakeholder sustainability matters

Mining companies need the social license to operate on top of legal compliance issues. It is noteworthy that Zimplats acknowledges the social license to operate as a sustainability issue. To gain and maintain its social license to operate, Zimplats is implementing CSIs to contribute to community development as well to engage with stakeholders on the same. Community concerns captured in the report include employment opportunities, equity stake in Zimplats and houses cracking from blasting activities. Concerns for NGOs are limited to the cracking of community houses. Well, it is critical for CSOs to influence Zimplats to acknowledge other vital concerns such as the harm caused by 2.5% royalty stabilisation agreement running from 1994 to 2019, disclosure of the Mining Agreement (MA), disclosure of payments made to government institutions and Zimplats’ registration in  Guernsey, a tax haven.

Mining agreement expires in August 2018

Zimplats’ 25-year mining agreement is expiring next year, August 2018. Optionally, this agreement can be renewed over 2 periods of 10 years each. It is important that CSOs push for contract transparency in the renegotiation of the new mining agreement including scrapping off the harmful 2.5% royalty stabilisation clause.

RBZ export incentive

Zimplats received $14 million from the RBZ export incentives from 1 July 2016 to 30 June 2017 for the 50% foreign currency earnings that it brought into the local economy. It is difficult to reconcile the fact that the treasury decried that mining is not fairly contributing the fiscus whilst government proceeds to pay export incentives to mining companies.

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Matabeleland South Key Asks on ASM Ease of Doing Business Reforms

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Matabeleland South Province held a two-day Artisanal and Small Scale Miners (ASM)   indaba under the theme “influencing ASM ease of doing business reforms to empower communities.” The indaba was held on 6 and 7 September 2017 at a district club in Gwanda town was fully subscribed with delegates from 13 associations.  148   people participated during the indaba, comprising of 74 females and 74 males, largely dominated by artisanal and small scale miners from the province.

The province has nearly 5000 registered small scale miners, 3 995 gold, 892 base metals and 113 semi-precious metals. These miners came from Matopo, Insiza, Mapisa, Shangani, Mpoengs, Filabusi, Mangwe, Gwanda, Bubi and Mpoengs.  Other stakeholder groupings that participated at the indaba include relevant government ministries and agencies, CSOs, CBOs, suppliers and the media.  Three ASM associations from Gwanda, that is, Youth in Mining, Women in Mining and Lushonkwe were the lead organisers. Technical and financial support was provided by the Zimbabwe Environmental Law Association (ZELA). Expected outcomes of the indaba were;

  • Documented specific asks of Matebeleland South ASM associations on ease of doing business reforms.
  • Improved knowledge on emerging and best practice concerning responsible and profitable ASM
  • Improved information sharing on regulatory development, investments and supply chain opportunities concerning artisanal small-scale miners

Find below the Mat South Key Asks on Ease of Doing Business in the ASM sector

 

 

Impediment Suggested solution Responsibility
1.

 

 

High prospecting licensing fee $200 To be reduced to$50 Ministry of Mines
2. High mining title registration fee $200 To be reduced to $100 Ministry of Mines
3. High cost of explosives purchasing $500 and storage permit $500 p/a Suggested fees $50 per each permit Ministry of Mines
4. High cost for change of ownership $500 and 1% of the selling price. Reduced to $200 Ministry of Mines
5. Custom milling permit too high at $5000 per annum Proposed cost $2000 Ministry of Mines
6. Carbon movement permit too high $500 per 6months $100 Ministry of Mines
7. Elution plant permit $500 per months $100 Ministry of Mines
8. Mining blasting licencing $200 and First Aid certificate $70 $100 and First Aid to be $10 Ministry of Mines
9. Approved prospectus licence $5000 $1500 Ministry of Mines
10. Ore removal permit, eg in Matebeleland south , miner from Mpoengs one has to 700km to and fro Permit to accessed at district level Ministry of Mines
11. Waiting period for mine registration takes up 6months- inefficiency If 30 days lapses one must deemed to have the permit Ministry of Mines
12. Dispute resolutions taking too long in the Ministry of Mines Urgent establishment of Mining Affairs Board at Province and Mining Districts Ministry of Mines
13. High court taking time to resolve disputes eg more than 2 years Special courts for mining disputes and court judgements to be delivered within 6 months Judicial Service Commission
14 Multi claim ownership Stem corruption (eg a whistle blowing facility) and a computerised mining title Ministry of Mines
15 Mining registration certificate replacement $150 $50 Ministry of Mines
16 Timeframe for replacing the lost certificate taking about 6 months At least two weeks Ministry of Mines
17 Mining title revocation communication poor Use SMS to communicate when the title expires Ministry of Mines
18 Revocation period short- 30 days

If the title expires through non-inspection, one must renew within 30 days

90 days Ministry of Mines
19 Reregistration of a revoked mining title costs $1000 $500 Ministry of Mines
20

 

 

 

21

Progress reports for the Environmental Management Agency should be done in 3 months

 

 

Payment of an EIA registration $253

 

 

 

 

           Methods of submitting

To introduce online method of payment

 

$100

 

 

 

Environment Management Agency
22 High costs of EIA consultants it can be $5,000 Popularising group EIAs to reduce the fees Zimbabwe Miners’ Federation and ASM associations
23 High affiliation fees to ZMF 500 per year per association $200 Zimbabwe Miners’ Federation
24 ZMF is competing with associations that it representing Individual members should be registered with ZMF Zimbabwe Miners’ Federation
25 Taking the roles of mines inspector, therefore fuelling corruption, like we have an operation for Filabusi we need fuel, launch Stick to their mandate since we have the mining inspectors ZRP
26 Unscheduled visits even at night which expose miners to robbery Provide a list of all operating officers like in the Midlands and also give schedule for visits ZRP
27 60% payment in US$ and 40% payment in bond notes is not working 100% US$ payment to miners except for the 5% incentives RBZ
28 Poor access to loan funds from FPR eg $30 million has so far benefited 179 people nationally. Copy the Agric and farmers model where loans are accessed at nearest Agri Bank

 

Our own miners bank

Allocation per province

 

Maximum loan threshold should be pegged at $15,000

 

RBZ
29 No value for money on service delivery like roads Value for money deliver public utilities like roads

 

Harmonisation of all RDC fees

Rural District Councils
30 Too many hands involved in the administration of rebates and it takes time eg 30 days One stop shop  
31 ZMF board restructuring, it must include other public stakeholders which includes Min of Mines, MMCZ, EMA, MBCU (police) RDC, lands, ZIMRA, RBZ, Fidelity One stop board from national, provincial and district MMMD, ZMF

 

Can data driven advocacy change the mineral revenue transparency landscape in Zimbabwe?

For Zimbabweans, mineral revenue transparency reforms have proved to be a mirage.  Possibly hope evaporated with the domestic version of the Extractive Industry Transparency Initiative (EITI), the Zimbabwe Mineral Revenue Transparency Initiative (ZMRTI) failing to take off since 2011.  Without transparency in the mining sector, it is difficult for the public to have a hard talk with government and mining companies on how their mineral wealth is being managed to deliver better schools, clinics and roads.  

The 2017 Resource Governance Index (RGI) by the Natural Resource Governance Institute (NRGI) buttresses this notion.  Countries that have not embraced international best practice on resource revenue disclosure like the Extractive Industry Transparency Initiative (EITI) are less likely to manage their resource wealth for the benefit of their citizens. This paints a gloomy picture for Zimbabwe which is ranked at number 81 out of 89 countries in the 2017 RGI.

Marange alluvial diamond wealth, a squandered opportunity evinces “the resource curse.” $15 billion was lost from the exploitation of Marange diamonds according to the President. Whilst the plundering of diamonds was taking place, the Treasury was sounding “like a broken record” on opacity in the management of Marange diamond revenue.

Through use of “alluvial data” as a colleague Jed Miller labels it, opportunities to influence mineral revenue transparency policy and practice reforms are gaining traction.  Alluvial data refers to data which available on the public domain, like alluvial gold, you do not need to dig deeper to access the data. Such data include mining companies published integrated annual reports, national budget statements and Auditor General’s reports.

 ZELA has a seat at the table as a stakeholder to the Mining Technical Working Group (TWG) on ease of doing business reforms. Through Publish What You Pay (PWYP) data extractors programme, ZELA is making its voice count in the mining TWG. ZELA is in the subcommittee that is working on a special artisanal mining permit meant to contribute to formalisation of artisanal mining.  Another issue on the agenda of the TWG that ZELA is seized with relates to the review of local mining taxes.

A subcommittee being led by ZELA involving the Ministry of Rural Development and Chamber of Mines has been formed to advise the TWG on review of local mining taxes. The Chamber of Mines is pushing for harmonisation of local taxes and the reduction of tariffs paid to local government by mining companies.

Working with the Ministry of Rural Development, Association of Rural District Council of Zimbabwe (ARDCZ) and Rural District Council, ZELA has proposed a framework that RDCs can use to make a compelling case on why mining companies must pay a fair share of local taxes. Mainly, ZELA has presented a weighty argument that the lack of transparency around mineral revenue transparency erodes the power of local governments to negotiate fair local tax deals with mining companies.

Basically, tax is a tool that is used to finance development. RDCs derive their “power to levy rates and taxes and generally to raise sufficient revenue for them to carry out their objectives and responsibilities” from the Constitutions, Section 276 (2) (b). Always, it is important for RDCs to link tax revenue and its impact on development.

If communities are not aware of policies concerned with how RDCs are generating mining tax revenue, the tariff agreements between RDCs and mining companies, the allocation and utilisation of mineral revenue to promote the progressive realisation of their Socio-Economic Rights (SERs), concomitantly, RDCs loose a key alley to hold to account central government and mining companies. It is also noteworthy that by promoting mineral revenue transparency, RDCs can solve information asymmetry within government ministries and departments. Furthermore, tax transparency will expose some mining companies that are quick to publicise their Corporate Social Investments (CSIs) at the same time defaulting on their obligation to pay a fair share of taxes to finance local development.

By taking some of the following steps, RDCs can enhance greater transparency through local budget public consultation processes to make mineral revenue information easier to understand to different users;

  • Actual amount paid by each mining company to the local authority and how it is calculated. That is the agreed tariff and number of units used to calculate taxes paid by mining companies. The number of unskilled labour and production volume are respectively as units for computing local taxes paid for extracting precious and base or industrial minerals.  Of course, through budget transparency initiatives provided in the RDC ACT, local authorities have been publicly disclosing this info. Transparency, however, transcends disclosure. The highest measure is when various stakeholder groupings including communities must understand the data.
  •   Mineral income per capita. As an example, local government can divide the total annual revenue paid by mining companies with the official number of the population size in their district. According to 2012 Zimstat population census data Mhondoro-Ngezi had a population of 104 342 people.  Suppose that Zimplats paid taxes amounting $1 million dollars to Mhondoro-Ngezi RDC in 2016, the income per head for Mhondoro-Ngezi translates to $9.58 in the same year and 80 cents per month. So if basic income grant is adopted by local authorities for all the local taxes paid by Zimplats, each head will receive 80 cents per month.
  • Mineral revenue as a percentage of total revenue generated by the RDC.
  • Mineral revenue linked with socio-economic development outputs like schools, clinics. This is important to demonstrate the important link between tax and development. By taking this path, RDCs can help to manage stakeholder fears of abuse of public revenue. Indeed, the Auditor General’s Reports for local authorities have consistently highlighted wanton abuse of public resources by several local governments.
  •   Comparing corporate social investments (CSIs) undertaken by mining companies with their tax contribution to local government. The table below shows data on CSIs undertaken by Zimplats from 2013 to 2017 available from Zimplats’ 2017 integrated annual report. Thus, Mhondoro-Ngezi and Chegutu RDCs can make use of such data to publicly compare with Zimplats’ tax contribution to local government.

Zimplats CSI 2017

  • Disclosure of contribution to Community Share Ownership Trusts (CSOTs) by mining companies in their jurisdiction. Some, mining companies argue that they contribute to community development through CSOTs in addition to local tax revenue and CSIs. For instance, Gwanda CSOT did not receive dividends from Blanket Mine in 2016 according to Caledonia’s ESTMA report.

Kurai Kingsley, the Trade Commissioner of the Canadian Embassy in Zimbabwe encouraged RDCs to push for the adoption of a free online tool, Towards Sustainable Mining, developed by Mining Association of Canada. The platform promotes public online access to key mineral revenue information different sources. Botswana has adopted the tool. This tool will assist to solve information asymmetry within government departments and allow for greater public access to mineral revenue information. 

ZELA has learnt the lesson that whilst the push for adoption of EITI is critical, there is need to work with individual progressive government agencies on mineral revenue transparency such as RDCs and Zimbabwe Revenue Authority (ZIMRA). Use of mandatory disclosures for listed mining companies in EU, UK and Canada can also be a game changer to Zimbabwe’s stalled mineral revenue transparency reforms. ZELA is now working with ARDCZ to come up with a standard template that RDCs can use as a best practice to promote mineral revenue transparency. This is one of the outcomes on the meeting involving RDCs, ARDC and Ministry of Rural Development held at the Rainbow hotel on 15 September 2017.  The ongoing 2018 local budget consultations offer exciting opportunities to start rolling out this exercise.

Formalising artisanal mining through a special permit

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Picture showing an example of calculations involved in gold trade

Government is warming up to the idea of formalising artisanal mining through a special permit. Recently, the Governor of the Reserve Bank of Zimbabwe disclosed that $15 million is being paid weekly to over 300,000 artisanal miners. Through formalising artisanal mining, government has an opportunity to earn the country much needed foreign currency. Also, this is in line with the constitutional provision that directs the state to put in place mechanism to ensure communities benefit from the exploitation of natural resources in their localities. Currently, the mining Technical Working Group on ease of doing business reforms is considering terms and conditions for a special permit on artisanal mining.

The matrix below is still a draft that has benefited from the input given by various stakeholders from ASM associations, CSOs and ministry of mines officials. Interested parties are encouraged to give their input.

Action Comments
The Mines and Minerals Amendment Bill must differentiate artisanal mining and small scale mining through the creation of a special mining title ideal for artisanal mining The Mines and Minerals Act and the draft Mines and Minerals Amendment Bill are silent on artisanal mining.
Artisanal mining should be defined through surface area and depth of the mining pit, number of employees, approved basic tools and equipment, a capital threshold and operating in designated area.

 

There is no universal definition of artisanal mining. This definition takes into consideration the parameters used in other jurisdictions like Tanzania, DRC and Mali
The suggested definition of artisanal mining is “any person or group of persons of Zimbabwean nationality authorised to carry mining activities in a designated ASM area using basic tools like as picks, shovels and wheelbarrows, the capital should not exceed $1000 should not exceed 10 employees maximum surface area 1 hectare, a maximum depth of 30 meters and the cite shall not have permanent infrastructure. Capital threshold has been capped to $1000 to manage the risk of small scale miners operating through an artisanal mining permit. likewise, to encourage development of artisanal mining into small scale mining. The maximum surface area for artisanal mining one tenth of a standard gold mining block. Maximum depth is pegged at 30m to manage safety and health risks.
Anyone convicted of a crime should not be given or should lose a artisanal mining permit. As a goodwill kick start the permit – licenses should be made available to those whose criminal record is only of a misdemeanours involving gold possession…An unorthodox method to ensure the social contract adherence to rules and procedures of the new permit, but also a gesture to indicate that business as usual is changing…

 

Government must survey and designated areas viable for profitable artisanal mining in each mining district. The opening up of reserved areas and forfeited claims offer opportunities for government to undertake this exercise. Artisanal mining designated cites manage the risk of having a mining title system that is rendered impracticable due to limited access to claims.
Mining companies must be proactive to set aside claims for artisanal mining acquired through tributary arrangements. Small scale miners are the main beneficiaries of current tributary arrangements with large scale miners. Thus, large scale miners should be encouraged to set aside claims for artisanal mining.
A mining title shall be available to any Zimbabwean above the age of 18 for a nominal fee be included $10

 

$200 is required to register a standard mining block of 10 hectares. Given that proposed artisanal mining surface area is 1 hectare, a tenth of the surface area for small scale mining, a $20 fee is applicable on pro rata basis. However, to promote artisanal mining, we are recommending a $10 fee.
An artisanal mining permit should be processed at local government level to avoid prohibitive distance of traveling to provincial mining offices to acquire a mining title. The Ministry of mine is responsible for issuing the artisanal mining permit although this responsibility can be delegated to local government. Local governments have environment officers who can be trained to assist ministry of mines with administration of an artisanal mining permit.
Adequate fiscal support to the Ministry of Mines is necessary to cater from the administrative burden emanating from issuing and monitoring of the artisanal mining permit. Without adequate fiscal support, it is difficult for the Ministry to efficiently administer the artisanal mining permit.
Environment Impact Assessments should be carried out by government for all designated artisanal mining areas. The operators should be given a prospectus which will indicate how they are going to rehabilitate

 

Since the authorised area for artisanal mining is restricted to 1 hectare per operator, it is ideal to have group EIAs. Government should take lead to avoid burdening artisanal miners with compliance costs which can fuel illegal mining.
A rehabilitation fund should be established through a Pay As You Earn (PAYE) scheme more or less similar to Fairmined or Faitrade standards

 

Fidelity Printers and Refineries to pay a premium to artisanal gold miners that is paid on condition that artisanal miners are operating responsibly on environmental, social and safety aspects
A one year tenure for the mining title renewable for a maximum of 3 years

 

Artisanal mining should be encouraged as a transitional mechanism to small scale mining. Hence the need to cap the renewal period to 3 years.
Gold production should not be used to define artisanal mining Alluvial gold mining is characterised by nuggets and it is important to encourage transparency in gold sales without the risk of losing the license.

 

 

Matebeleland South Artisanal and Small Scale Mining Indaba kicks off today

Mat Soiuth Indaba.jpg

The gathering is a positive in that artisanal and small scale miners are learning and sharing their experiences as peers.” Dosman Mangisi, information officer, Zimbabwe Miners Federation.

“We designed a short course tailor made for artisanal and small scale mining, a certificate in fundamentals for mining. We can also do outreach trainings for miners at $160 per person over one week. We want to market our training services” Bhekani Sibanda School of mines

“Artisanal and small scale miners lack platforms to learn about key developments in the sector. This indaba is a welcome development” Matilda Masia Gwanda women in mining.

“This indaba is opening new doors by promoting engagement involving artisanal and small scale miners, relevant government ministries and departments, suppliers and CSOs” Khumbulani Moyo Chairperson of Matebeleland South Small Scale Miners Association

“We are here to learn from Matebeland South indaba as we prepare for the Matebeleland North ASM indaba to be held at Inyathi training centre on 21 and 22 September” S Ndlovhu, treasurer, Bubi Small Scale Miners Association.

“we have the opportunity to teach artisanal and small scale miners about safe mining methods” Furusa, Chief Engineer, Ministry of Mines, Matebeleland South province.

“The platform is empowering the Associations in Gwanda to organise their own indaba, bringing in stakeholders from the various districts to discuss the impediments and opportunities of ASGM. The associations were responsible for organising the event; invitations, venue identification, preparations, drafting the agenda and facilitating the event with ZELA supporting them financially” Joyce Nyamukunda Zimbabwe Environmental Law Association

Over 130 stakeholders have converged at a District Club in Gwanda town for the two day Matebeleland South Artisanal and Small Scale Mining indaba. The theme for the indaba is “influencing ease of doing business reforms: A focus on ASM to empower communities.”  Stakeholders include ASM associations from the province, Zimbabwe Miners Federation, School of Mines, Ministry of Mines, Fidelity Printers and Refineries, Environmental Management Agency, suppliers, CSOs and CBOs.  Some of the ASM associations represented here are from Felabusi, Matopo, Mpoengs, Mangwe and Beitbridge districts.

The overarching objective of the indaba is to create space for ASM players in the province to meet and share experience on influencing ease of doing business policy and practice reforms. Generally, ease of doing business reforms have been looked at through the lens of promoting Foreign Direct Investments (FDIs).

Interestingly, the ASM sector’s significant contribution to the country total gold production has been instrumental in raking in much needed foreign exchange. That is why the Reserve Bank of Zimbabwe (RBZ) is on the record of calling for decriminalisation of gold possession and formalisation of ASM sector.  Formalisation of artisanal mining is on the agenda of the Mining Technical Working Group (TWG) on ease of doing business reforms.

The signature deliverable for the indaba is the documentation of various policy and practice impediments that are affecting the easy of doing business for artisanal and small scale miners in Matebeleland South province. This will enable the ASM associations and miners to be more articulate when engaging policy makers on the change that they want to see,

For more details, follow #ASMinMatSouth

 

Artisanal mining and ease of doing business reforms in Zimbabwe

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Formalising artisanal mining in Zimbabwe is one of the priority areas for the mining Technical Working Group (TWG) on ease of doing business reforms. A subcommittee has been formed to make recommendations on terms and conditions for a special mining permit that will help to formalise artisanal mining. The subcommittee comprises the Ministry of Mines, Zimbabwe Miners Federation (ZMF), Zimbabwe Environmental Law Association (ZELA), Zimbabwe Artisanal and Small Scale for Sustainable Mining Council (ZASMC) and Metallon Gold Zimbabwe.

Government desperately needs foreign currency to finance its needs like fuel, electricity and raw materials for industry according to the mid-term monetary policy statement. Gold along with tobacco is a major foreign currency earner. This has prompted the Reserve Bank of Zimbabwe (RBZ) to pursue a “no questions asked policy” to promote formal channelling of gold from artisanal miners. The “no questions asked policy is contrary to the Gold Trade Act (Chapter 21:03) which makes it illegal for one to possess gold without a valid mining registration permit or a gold buying licence.

RBZ’s “no questions asked policy” only suffices if one manages to evade the Zimbabwe Republic Police (ZRP) minerals and border control unit from mining right up to the point of delivering gold to Fidelity Printers and Refineries (FPR) according to Engineer Murove, the ZASMC President.

High costs and cumbersome processes or paper work like the Environment Impact Assessments (EIAs) are pushing artisanal miners to operate outside the law. In other instances, a number of farmers who are not necessarily miners are discovering alluvial gold nuggets in their fields. Since the law criminalises illegal gold possession, they are at risk of being arrested and face a 2-year jail sentence.

Illegal possession of gold

Twitter comment by Deprose Muchena responding to the imprisonment of  small holder farmers who discover and mine gold in their plots without a valid mining title.

Coming up with a special permit for artisanal mining operations will prevent a free for all scenario if gold decriminalisation is pursued “cate blanche.”  Benefits of decriminalising gold possession through a special permit for artisanal mining are not only economic but also a significant livelihood boost to millions who depend on artisanal mining for jobs and income generation.

Of course there is more to formalisation of artisanal mining than a special mining permit which recognises the ability to pay principle among other issues. Exploration services must be provided to establish viable mining areas for artisanal mining. This will avoid unnecessary environmental challenges arising from digging of holes in areas that have no profitable gold deposits.

Artisanal miners will also need some support to come up with bankable business plans to access capital and how to manage windfall revenue. It is very common for artisanal miners to squander their wealth through poor investment choices like luxury cars. Occupational health and safety standards is another important area to focus on to promote responsible growth of the artisanal mining.

EASE OF DOING BUSINESS IN THE MINING SECTOR (ZVISHAVANE MBERENGWA MINERS ASSOCIATION).

The Curse of the Gold Rush

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