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Mukasiri Sibanda's Blog

articles on mineral resource governance

Battlefields Artisanal Small-Scale Mining National Disaster: What We Know, Lessons Learnt and Planning for the Future

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Picture taken by Mukasiri Sibanda, over a thousand people gathered to find out the fate of their loved ones

A day before the Valentine’s Day on 13 February, tragedy struck Zimbabwe’s artisanal gold mining sector. How ironic.  Gold is used to produce jewellery, a symbol of love and wealth. However, the Battlefields disaster, where 8 miners were rescued alive and 24 bodies were recovered at Cricket mine, is self-evident, there is no valentine for key gold producers – Artisanal and Small-Scale Miners (ASMers).  Another irony is that ASMers were battling for their lives in a place called Battlefields. The battle of trapped miners was an episode of tough socio-economic struggles being fought by many Zimbabweans.

These are not just gold diggers.  “Gram by gram” ASMers are digging the country out of its foreign currency woes. Gold production from ASMers has been phenomenal, from 3.9 tonnes in 2014 to 21.7 tonnes last year – 2018.  Buoyant gold production from ASMers eclipsed large scale mining output for the past 2 years.

Further, ASM has emerged as a shock absorber to the country’s high unemployment rate, youths are the most affected.  More than 500,000 people directly work as ASMers in Zimbabwe.  And more than a million are indirectly benefiting from (Artisanal and Small-Scale Mining) ASM activities. Clearly, ASM is indispensable to Zimbabwe’s socio-economic growth trajectory and this is recognised and acknowledged in key economic documents.

Here are grounded observations on Battlefields disaster from the Zimbabwe Environmental Law Association (ZELA). ZELA is an organisation that is working to influence government to formalise and regulate ASM and to put in place mechanism to ensure communities benefit from resources in their areas as required by the Constitution, Section 13 (4).  ZELA believes that ASM is a front door way of empowering resource rich but poor communities. This resonates well with the Africa Mining Vision (AMV) which regards ASM is vital to socio-economic developemt. The ongoing legal reforms through the Mines and Minerals Amendment Bill offers a timely opportunity for ASM to be recognised as a key economic driver and provided with support to ensure that it is done in a way that promotes safety, health and environmental protection to avoid future disasters like the one that has happened at Battlefields.

The Battlefields disaster:  Facts and Numbers

8 people were rescued alive on Saturday, 16 February 2019.

1 person among the 8 rescued died at the hospital according to an unconfirmed report.

3 days, the number it took to rescue 8 people alive and recover 24 dead bodies.

1 powerful pump from Zimplats was singled out by relatives of the deceased miners as an exemplary response to the emergency. With more pumps like that, dewatering was not going to take 3 days or more.

More than a thousand people were on site, mainly relatives and friends who were eager to find out the fate of their loved ones.

1-day, powerful rains received in a general hot and dry period, is all it took to bring both hope to farmers and trauma to miners.

1 doctor was available to help during the entire rescuing mission.

The forgotten side of ASMers, collegial, courageous and proud

ASMers are commonly viewed as violent and a misfit in communities where they work in. When it comes to rescue efforts, huge branded machines provided by Large Scale Mining (LSM) companies were easy to notice. One could not struggle to conclude that this was a job for the big men, ASMers being peripheral actors to the rescue mission. To the contrary, ASMers were the main actors. For days, a sizeable group of AMSers hardly slept, doing all the dirty work required to rescue their colleagues. “Even though miners trapped may not be our relatives, they are our colleagues, we will not rest until their bodies are buried in their homesteads” said one ASMer. The fatigue was telling. Some were occasionally dosing. But, the determination was unshakable.

Relying on their expertise, bravery, experience and love for their colleagues, they were the ones running the underground operations. Coordinating pumping activities, rescuing their colleagues and retrieving the dead bodies of their colleagues. There were given food but no refreshments. There was no one to regularly perform medical check-ups, to offer counselling on how to cope with this trauma, and to help them to take coordinated rests.

Large scale mining (LSM) and showing good corporate citizenship

In an environment where LSM is increasingly under pressure to fairly share mining benefits with local communities, positive response by large scale miners to come to the rescue of ASMers is remarkable.  Primarily, LSM operations are legally obligated to pay fair share of taxes to government and corporate social investments (CSIs) are voluntary, although necessary for social license to operate. Where government, the recipient of mining tax revenue was hardly noticed, large scale miners volunteered to help.

The Zimbabwe Platinum Mines (Zimplats), RioZim and Afrochine smelting company contributed equipment, machinery and personnel to the rescue mission. The equipment and machinery included heavy duty water pumps, electricity generators and ambulances. Mr Chirandu, a relative of one of the miners who was rescued alive commented that “had there be more powerful water pumps similar to the one provided by Zimplats, the dewatering process was not supposed to take longer.”  The mining pits were flooded on Tuesday midnight and it took until Saturday morning to start rescuing the trapped miners.

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Picture taken by Mukasiri Sibanda

Government response was disappointing

The Battlefields mine disaster was declared a national disaster by government. A move that meant families will be given assistance by government to bury their loved ones – coffins, blankets and cash, one thousand dollars per family.  Some relatives of trapped miners felt that government lacked empathy. “It is energy sapping to note that on Friday, government rushed to promise to assist with funeral costs at a time when we expected government to provide resources to rescue the trapped miners. It was insensitive for government to act as if all trapped people had died” said one relative of the trapped miners.

The Reserve Bank of Zimbabwe (RBZ) is quick to appreciate gold contribution from ASM as a major foreign currency generator. Fittingly, funds from RBZ are driving ASM gold production. Knowing that safety issues are a major risk in mining business, high vulnerability of ASM to safety disasters must have compelled government, RBZ especially, to come up with an emergency rescue package. Poignantly, when gold rushes with prolific reefs are involved, there are mobile units that are deployed from by RBZ, through Fidelity Printers and Refiners (FPR), a subsidiary unit. When tragedy strikes, RBZ hibernates.

When 6 people were rescued on Saturday morning, 16 February, there was no doctor on site to immediately offer medical check-ups. Only one ambulance from Zimplats was on standby. On a positive note, the only doctor seconded to the site was resting and responded hours later. As time went by, the number of ambulances increased to 5. Zimplats provided an additional ambulance and interestingly, Sanyati Rural District Council (RDC) provided another one.

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Picture taken by Mukasiri Sibanda

The response by Sanyati RDC provides gripping evidence why mining tax revenue should be shared fairly between central and RDCs, which are better suited to respond on local service delivery issues. Therefore, RDCs must not be treated as “rule takers and revenue takers” by central government. After all, Section 276 (2) (b) of the Constitution gives local governments powers “…to levy rates and taxes and generally to raise sufficient revenue for them to carry out their objects and responsibilities.”

“Economy first before politics” this mantra finds its strongest test in ASM

To rebrand and to reposition Zimbabwe better after Mugabe’s era, repeatedly, President Mnangagwa states that “economy first before politics” and that “Zimbabwe is opening for business.” This rebranding thrust faces a stern test in the ASM sector. The dirty hands of powerful politicians have their fingerprints all over the chaos in the ASM sector, including this latest one – the Battlefields disaster. Falsely hiding under the banner of empowerment, politicians are allegedly frustrating efforts made by Ministry of Mines and police to bring sanity in the sector. It is alleged that the Ministry of Mines had ordered the shutdown of the mines which led to the disaster on safety concerns and claim ownership disputes. However, business continued as usual. There are fears that the numbers of people trapped under the ground was deliberately understated to protect politicians behind this disaster from greater public scrutiny. It appears ZANU PF, the ruling party, is more powerful when it comes to regulating the ASM sector than the likes of Ministry of Mines and the police. ASM is therefore a key indicator to the “new dispensation” thrust to rebrand and position the economy first before politics.

It is easier for CSOs to point fingers, but they can do better 

There was no emergency meeting called by civil society organisations (CSOs) to strategize on how to effectively respond to the Battlefields mine disaster.  CSOs working with ASMers must seriously consider upskilling their expertise on disaster and risk management in ASM sector to ensure that there is more comprehensive and coordinated response should there be future disasters. Such an understanding can guide CSOs to assess the preparedness and effectiveness of rescue operations to help plugging the holes. Advance preparations are always critical, for instance, having doctors on standby in all districts where artisanal mining is taking place and volunteers who can give first aid and counselling services among other services. While not enough, ZELA donated first aid medical equipment for 10 people, drinking water and fruits.  However, a stitch in time saves nine.

Conclusion

The Battlefield disaster must never be used as an excuse for heavy handed response by government in the name of bringing sanity to the ASM sector. Rather, this disaster is an opportunity for a multi-stakeholder approach to safe, responsible and sustainable growth of the ASM in Zimbabwe and the ongoing reforms in the minng sector through the Mines and Minerals Amendment Bill offers a very good opportunity for this. The ASM sector is essential to the realisation of Zimbabwe’s development agenda because of its compelling economic and social contribution.  Government must prioritise the formulation and implementation of an artisanal mining policy as required AMV. The intervention by large scale miners should be used as a springboard to promote greater linkages between ASM and LSM as envisaged by the AMV. To control the chaos associated with ASM, government must deal with powerful politicians and walk the talk – “economy first before politics.

 

Acknowledgements

ZELA is grateful to its partners who are supporting its work on ASM in the gold mining sector and made this grounded response possible. These are the European Union , Christian Aid , the Netherlands Embassy , Norwegian Church Aid and TRACE

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A medical doctor keen to invest in ASM operations

My name is Garai Shava a 25-year-old medical doctor currently doing my houseman ship at United Bulawayo Hospitals (UBH), Bulawayo, the second largest city in Zimbabwe. I would describe myself as a young man with zeal for trying new things and going out of my comfort zone to contribute to initiatives to end poverty and to end the suffering of all Zimbabweans. I would have said I am an entrepreneur, but I feel the word is greatly abused by all folk and sundry. I have set up and pioneered several projects in different sectors albeit with differing fortunes all-round. It is with this background that I developed a keen interest in investing into the Artisanal Small-Scale Mining (ASM).

In any field, the key to success is having an in-depth knowledge of what works, what does not work and what must be improved. For me, it was difficult to start with, I had no prior knowledge of the mining sector. All i had in mind was violence and immoral behaviour. The advent of social media has broken down massive barriers which stood between people of differing fields. Where communication was slow and inefficient, social media has come in and solved this problem to connect even with the least likely people. That is how I met Mr Mukasiri Sibanda via the micro blogging social media site twitter. His profile showed his involvement with ZELA and ZIMCOOD. Proving to be the exact link which I needed to enter the world of ASM.

We quickly arranged to meet. Within a day of meeting, we travelled together to BUBI on a mission to give me a hands-on experience of ASM. What awaited me was a revelation of unprecedented proportions. All I had in mind was a very unprofessional setting with blood stained tools and violent fights all around. To my surprise I found a well organised unit with miners working on well maintained shafts with proper clothing though not adequate for all. I met a woman who employs close to 70 predominantly young miners. I figured that the workers supported families of their own through their work on the mine. Imagine, the potential of such enterprises to help reduce the rampant unemployment rate in the country. Such small-scale activities can bring positive economic growth to many rural communities.  With proper funding and investment, I see many people being empowered especially women and youths.

I observed the need to health education directed at the miners won issues to do with general hygiene and sexual and reproductive health. Programs can be planned and implemented to educate miners wives on health-related issues seeing they are a high-risk group considering the high prevalence of HIV in artisanal miners

 

Return of Anjin To Marange Diamond Fields: the blindside of Zimbabwe is open for business agenda

Government is on the overdrive to attract investment to stimulate desperately needed socio- economic development. Since Zimbabwe is endowed with huge mineral wealth, mining is the heart beat of the “Zimbabwe is open for business” mantra.

By nature, mining is a capital-intensive business. Attracting investments, therefore, is critical to turn mineral wealth into modern schools, hospitals, roads and water infrastructure. Care must be taken, however, to choose investors that do not swindle citizens of their right to get a fare share of benefit from mining.

So far, there has been strong public disquiet on mining mega deals that are being sealed by government. Since the contracts are not publicly available, citizens’ radar cannot detect how the mega deals are primed to dig Zimbabweans out of poverty.

Government’s move to select Anjin Investment (Chinese) and Alrosa (Russian) as the two foreign companies that will explore, and mine diamonds escalates cynicism on mining mega deals.  Anjin Investments is not a new investor. Has government “learnt nothing and forgotten nothing” from fresh saga on “missing $15 billion” from Marange.

Anjin Investments was one of the seven companies that was operating in Marange diamond fields prior to the consolidation of the mines in 2016. The other companies included Mbada Diamonds, Diamond Mining Corporation (DMC), Jinan Investments, Marange Resources, Kusena and Gye Nyame. Government owned 100% stake in Marange resources and 50% stake in the other six entities that were mining diamonds in Marange.

In a rare show of convergence of views, government, civil society organisations (CSOs) and communities, expressed huge disappointment with diamond companies that were operating in Marange. Chinamasa, the former Finance Minister gave a damning assessment that “…. there was greater economic impact from diamonds during times of uncontrolled alluvial panning than what is being realised following introduction of formal diamond mining arrangements.”

Along with Parliament, the Office of the Auditor General (OAG) raised several red flags concerning the joint venture companies that were operating in Marange. Chindori Chininga’s 2013 report on diamonds flagged that there was no transparency in the manner which government’s joint venture (JV) partners were selected.

The report noted that from the due diligence exercise undertaken by Zimbabwe Mining Development (ZMDC), it emerged that the selected joint venture partners “have no diamond mining as part of their vision and growth strategy.” For example, government’s JV partner in Anjin Investments is Anhui Foreign Economic Construction Company Ltd of China (AFECC).

OAG pointed out in 2012 that Glassfinish investments failed to pay $40 million for acquiring ZMDC’ 40% stake in Anjin Investments. Shareholders of Anjin Investments are AFECC 50%, military linked Matt Bronze Investments 40% and ZMDC 10%.

Matt Bronze Investments acquired shares in Anjin Investments via a related company, Glassfinish Investments. Parliament report on missing $15 billion recommended that Government arms such as the security sector should not be involved in mining ventures and should focus on their core business.

OAG and Parliament noted that Anjin Investments never produced financial statements to account for its diamond mining operations. According to Parliament report on missing $15 billion, “the company started operating in 2010 and from its inception to 2015, produced approximately 9 million carats which generated about 332 million dollars in revenue. Out of that figure 62 million dollars went to government as royalties and 86 million dollars was spent under corporate social responsibility.”

Because of Anjin Investments’ failure properly account for its business, OAG could not verify the investment made by government’s JV partner as per JV the agreement. And taxes paid to government as well.

ZMDC contributed a diamond concession and the JV partners were supposed inject agreed funds to meet mining development an operational cost.  Although OAG could not verify whether the agreed amount was invested in Anjin Investments, the company admitted before Parliament in 2018 that the full agreed investment was not met. The agreed capital contribution and amount were not stated though.

Due to its military connections, Anjin Investments constructed a defence college amounting US$98 million. This shows poor public expenditure prioritisation. Modernisation of health and education is a major priority. Top government officials are squandering the country’s scarce foreign currency by seeking abroad modern health and education services for their families.

Of course, the Chinese are our all-weather friends, but, in Anjin Investment’s case, government should put national interests first. How can a company mine diamonds from 2010 to 2015 and fail to produce audited financial statements, a basic integrity requirement? The JV partners failed to inject the agreed funds into the business and yet we expect the company to be born again.

Government should make efforts to recover $40 million from Glassfinish for acquisition of ZMDC’s 40% stake in Anjin Investment. Parliament should hold accountable, the Minister of Mines, Honourable Winston Chitando, on the selection procedure that resulted in the choice of Anjin Investments and Alrosa. What happened to the agreement involving Vast Resources and Botswana diamonds to explore diamonds in Marange?

National interests should not be used as a ruse to evade accountability. Section 315 (2) (c) of the Constitution requires Parliament to play an oversight role during negotiation of mining contracts, including performance monitoring of mining contracts.

It is disheartening to note that when the President sealed mega deals in Russia, he requested assistance to modernise the military. What Zimbabwe needs now is to modernise its health and education services. Mining agreements should be made public to enable citizens to scrutinise the fairness of the deals. A proactive move to hinge sustainable socio-economic development on mining as envisaged by the Transitional Stabilisation Plan (TSP).

Diamonds should sparkle in the fight against inequality

With roughly $15 billion allegedly lost from Marange diamonds, the opportunity to fight inequality through domestic resource mobilisation was possible squandered. All is not lost though. This undesirable situation can be reversed in the quest to fight inequality.  Government, therefore, must immediately adopt the following measures to ensure that diamonds champion the fight against inequality in Zimbabwe.

  • Zimbabwe Consolidated Diamond Company (ZCDC) must give 10% equity to Marange-Zimunya Community Share Ownership Trust (CSOT). This will legally empower the community to get a share of profit from diamond mining activities in Marange. The softened indigenisation and economic empowerment framework still requires diamond and platinum sectors to cede 10% equity to host communities.
  • To fully exploit diamonds in Marange in a manner that promote community access, ownership and control of resources, ZCDC must move with speed to formalise artisanal diamond mining activities. “Indeed, there was greater economic impact from diamonds during times of uncontrolled alluvial panning than what is being realised following introduction of formal diamond mining arrangements” former Finance Minister, Patrick Chinamasa, 2016 National Budget Statement. Formalising artisanal diamond mining resonates well with Washington Declaration on Integrating Development of Artisanal and Small Scale Diamond Mining with Kimberley Process Implementation Kimberly Process (KP)
  • ZCDC must disclose payments made to different government institutions like Mutare Rural District Council (MRDC), various taxes paid to Zimbabwe Revenue Authority and Ministry of Mines. This disclosure will help the public to connect the dots between diamond mining activities and mobilisation of tax revenue to fund social service delivery. The Constitution, Section 276 (2) (b) empowers local authorities to mobilise resources from economic activities to fund local service delivery. By disclosing tax contribution to Mutare RDC, ZCDC can acquit itself well on how the entity is contributing to local development rather than glossing its Corporate Social Responsibility (CSR) activities. All in all, government must embrace move with speed to implement the Extractive Industry Transparency Initiative (EITI).
  • Former companies linked with looting of Marange diamonds should not be allowed back. We have noted with concern activities on claims formerly owned by Anjin that the Chinese and military owned outfit is preparing to come back. Notably, the Auditor General raised a red flag that Anjin failed to produce audited financial statements to verify depletion taxes paid to government.

 

 

Panning, gold detectors, sponsorship: Sophia’s journey as a small-scale gold miner

My name is Sophia Takuva. I am a 30-year-old woman gold miner in Zvishavane, Midlands Province of Zimbabwe.

I started mining in 2014 as an artisanal miner. I was doing gold panning by the riverbank. We would put mercury in a panning dish and then dig a small pit in the river bank. The river supplied the pit with water as it flows. After that one would step inside the pit and put the panning dish with mercury under the water. We use our hands   to put the soil in the dish and also to do panning.

As time passed by, gold detectors emerged. This was an experience of a lifetime in mining.  It was easy way to discover gold nuggets through the use of gold detectors as compared to panning. We usually dig open pits and hip the ore then the use sensor or scanner. In the process we usually cut down a lot of trees. This is so because in the past we discovered more nuggets under the trees. There is a myth that says roots trap gold nuggets. I failed to get a job elsewhere therefore I practiced mining as a source of income.   

As time passed on, I started to see benefits of mining. I could afford to buy clothes, food, pay rent as well as school fees for my siblings. On seeing this, my passion for mining grew. I ventured more into mining and started sponsoring small scale miners. I supplied explosives, diesel and catered for other operational expenses. We agreed to share after milling on 33.33% mine owner, 33.33% workers and 33.33% sponsor. We shared profits after deducting expenses incurred. During the mining process we opened pits and left them uncovered. Also, the miners didn’t have Environment Impact Assessment (EIA) certificates so whenever Environment Management Agency (EIA) teams came, we ran away to the nearby bushes and came back to the mine when we saw them driving off.

On gold processing at the mines or mills, we didn’t use mercury retorts. We burnt our amalgam gold on open air and also, we do (Serengeti) to recover more gold using our hands to touch mercury.

I was advised by another miner to join Miners Association then I started to attend meetings. I learnt a lot about the relationship between mining and the environment. Whenever we do meetings, EMA officers come and teach miners how to do mining sustainably while preserving the environment.

This year I managed to prospect and peg my own mine though my certificate is not yet approved. I am happy with the reduced EMA fees. As a small-scale miner with a project worth less than $25000 I am going to pay for an EIA for only $253.58. I attend a lot of workshops, especially by ZELA, that teach us how to mine sustainably for development and preserve the environment for the next generation.

I am now a responsible miner and have been equipped with knowledge during the leaders’ workshops we had for the past 3 days. As women miners we are going to plant trees and do a nursery for our women association, close open pits and pay Environment Management Plans. I endeavour to inspire other women miners.

 Contact details: 0717 030 814 takuvasophie@gmail.com watsapp: 071703030814 twitter: sophieTakuva@mining

Small scale gold custom millers demand urgent ease of doing business reforms

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Small scale gold custom millers having a dialogue on ease of doing business reforms

Introduction

Zimbabwe is open for business. A mantra that the President seizes every opportunity to tell, to rebrand and prime the country for economic growth that delivers jobs and quality service delivery – an upper middle income by 2030. But, how open is Zimbabwe for business?

To explore this question and to perhaps proffer alternative policy and practice reforms for making a point that charity begins at home on ease of doing business reforms, attention is paid to artisanal and small-scale mining (ASM), especially small-scale gold custom millers. After all, ASM is an indispensable sector to warrant government special attention on policy matters since the sector is helping to dig the country out of its foreign currency woes and unemployment scourge.

Small scale gold millers are important players in the gold production value chain. They offer ore milling services for gold recovery to artisanal and small-scale miners (ASMers) who cannot afford their own milling facilities. An analogy can be drawn with grain small holder farmers who use grain milling services to get mealie-meal in rural areas.

On Friday, 7 December 2018, over 30 small scale gold custom millers from Matebeleland met at the Methodist Centre, Bulawayo, to reflect on recent spate of closures of their businesses, the challenging business environment, and how to robustly engage with relevant government institutions to ensure ease of doing business.

The meeting also provided a platform for Zimbabwe Miners Federation (ZMF) to interface with small gold custom millers and reassure its key constituency that the mother body is up to the task on fronting engagement with relevant government institutions. A necessary move, considering that ZMF interventions were primarily placed on artisanal and small-scale miners (ASMers).

ZMF is a mother board of all associations in artisanal and small-scale mining (ASM) value chain, the miners, custom millers, buyers and suppliers. The Zimbabwe Environmental Law Association was on hand to learn and share insights on ASM and resource nationalism, exploring alternative pathways to optimise development opportunities from mining. ZELA is a public interest law organisation inspired to ensure that all citizens enjoy a fair share of wealth from the extraction of minerals.

Setting the tone for a robust conversation

In her opening remarks, Henrietta Rushwaya, ZMF president highlighted that the meeting is being held at a time when monthly ASM gold deliveries to Fidelity Printers and Refiners (FPR) had plunged by 50% to 602.30 kgs in November from 1,199.13kgs in October. Averagely, ASM contributed monthly gold deliveries amounting to 2,043.95 kgs from January to October 2018. This worrisome development is attributed to supply shocks, mainly diesel, a large source of power for ASM because most players have limited access to electricity power lines. Long fuel queues are the order of the day and this is hurting ASM gold production. The ZMF president raised a red flag on the uncompetitive way FPR was paying for gold deliveries from ASM compared to the black market. FPR pays 70% cash in US$ and 30% as bank transfer whilst the black market is ready to pay 100% cash payment in US$. Of course, the official argument is that the US$ and bank transfer are trading at par. Yet on the ground, US$1 fetches anything $3 at a bank transfer rate. She also emphasised that ease of doing business reforms are critical to enable small scale gold custom millers to play a pivotal role in boosting the country’s gold output. Buttressing her point, she referred to the 2016 Midterm Monetary Policy Statement (MPS) issued by Reserve Bank of Zimbabwe (RBZ). The 2016 Midterm MPS revealed that high compliance costs are an impediment to the development of gold custom millers.

“Reduction in custom milling fees from the current US$8 000 on the basis that when the fee was US$2 000 there were 485 millers which were registered but now at US$8 000 the registered millers are now around 51. The challenge is that there are many millers who cannot afford to pay the required fee of US$8 000 but are still operating and selling their gold on the black market and/or smuggling gold out of the country.” RBZ, 2016 Midterm Monetary Policy Statement (page 65).

The ZMF president also appealed for a frank discussion among gold custom millers and to be focused on coming up with strategies for ensuring that government listens and acts according to address their concerns. She highlighted that the Bulawayo meeting with Custom millers is a kick start to ZMF’s programme of engaging with gold custom millers across the country.

ZELA’s value proposition

Mukasiri Sibanda shared ZELA’s value proposition to small scale gold custom millers which revolved around empowering the players to document and tell their own stories to show case challenges, positives and to demand the change they want to see. This will help to count negative publicity escalating ASM risk profile with policy makers, investors, market and the public. Oftentimes, ASM stories have headlines on violence, environmental, safety and health challenges and gold leakages. Unless, the players in ASM learn to tell their own story, they lose control on influence public dialogue on the sunny side of ASM as an integral component of rural economies. Its impact on employment creation, income generation and stimulation of community enterprise development.  The voices of small scale gold custom millers must be heard beyond the meeting walls, to appropriately and continuously inform stakeholders on key developments in the sector. He also challenged small scale gold custom millers to take seriously the threat posed by sharp fall of gold deliveries from ASM.  Policy markers willing to use a stick will take this as an excuse to come up with punitive measures to address alleged gold leakages. Past lessons should serve as a wakeup call to ASM players. Operation Chikorokoza Chapera (an end to artisanal mining) in 2007) was designed to stop gold leakages from ASM and to enhance sustainable environmental management practices.

Charged conversations on challenges faced by small scale gold custom millers.

“We have meeting always to discuss the challenges that we are facing but nothing changes on the ground. The same problems are persisting. We are wasting time. Government is not hearing our concerns” Small scale gold custom miller

“It is the duty of the ZMF to take your concerns to relevant government institutions. The president has ready access to the Minister of Mines, FPR management, RBZ governor and other key offices. So be assured that this is not a talk show” Wellington Takavarasha, ZMF CEO

“Small scale gold custom millers should think outside the box when coming up with strategies to engage with government to improve the ease of doing business environment. Consider that if recommendations from Monetary Policy Statements by RBZ, a key government, on ease of doing business in ASM sector are not being implemented, who is frustrating the process? What does it take to achieve institutional harmony in government?” Mukasiri Sibanda, ZELA’s Economic Governance Officer.

Foreign currency retention ratio, what is at stake

Theoretically, FPR is paying 100% value for gold deliveries from ASM. 100% payment from FPR. However, ASM gets 80% of the value for delivering gold to the formal market (FPR). The main cause is that FPR pays 70% cash in USD and the reminder 30% through a bank transfer for gold deliveries from ASM.  Although the official position is that the USD is at par with the bank transfer money, the market forces tell a different story. USD traded with RTGs or bond notes at a premium. Suppliers of equipment and consumables are demanding payment in USD. Therefore, in USD terms, the 30% payment through bank transfer equates to US$0.10 at most. This is the basis for the argument that practically, FPR has unfairly discounted the gold price by 20%. Since many players in ASM sector live from hand to mouth, the working capital is eroded as well as the ability to capitalise profits to increase production.

“Breakdowns are frequently experienced at our gold custom milling plants coupled with unreliable   transport system too. Miners wait for 3 to 5 weeks to have their gold ore processed. This is hurting production. We cannot buy spares with 30% payment we receive through bank transfers.” Small scale gold custom miller from Bubi

The other disastrous effect is that the 20% discount s fuelling the black market.

“Let us be honest, government is the one responsible for gold leakages. Who is going to sell gold to FPR and get 80% of value whereas the black market is read to pay 100% value in US$” Remarks by one small scale gold custom miller from Esigodini

Upon being asked how much gold is being channelled to the black-market because of government’s unfavourable payment methods, different figures were thrown around.  Some estimated that 70% of gold is being diverted to the black market, others said roughly 50% and others said third. Given that for the first 11 months of the year (January to November), ASM delivered 21 tonnes of gold to FPR, 70% = 14.7 tonnes; 50% = 10.5 tonnes; and 33.33% = 7 tonnes. Although different figures pertaining to gold leakages were given, the common denominator is that the leakages are huge challenge to government, not just to regulate the sector – stick approach but to create and enabling the environment – carrot approach.

Erratic diesel and electricity supplies choking gold production

Majority of the small-scale gold miners and custom millers do not have access to electricity power lines. Mainly, they use diesel to power their compressors, water pumps and gold mills. Acute fuel shortages being experienced across the country are having adverse effects on ASM gold production.

“Government must not look very far to find answers on the plunge of gold deliveries from ASM” gold custom miller commenting on the fuel crisis

There were different views on what government must do to ensure reliable fuel supplies to ASM sector. Some felt that government should allow some fuel stations to sell fuel in foreign currency, for instance US1 per litre. Others sharply disagreed arguing that the 30% foreign currency retained by RBZ is supposed to carter for fuel supplies using bond notes or bank transfers. In the end, it was agreed that government should set aside dedicated service station for uninterrupted fuel supplies for ASM and that fuel payments should not be in forex.

Unreliable fuel supplies are not the only challenge, erratic electricity suppliers are a major problem too.

“literally we know we have loss of electricity for 2 days each week in Umguza. Miners can take 3 to 5 weeks for their ore to be processed. We end up losing customers.” Small scale gold custom miller from Umguza

Ease of doing business concerns: administration bottlenecks

The narrative that Zimbabwe is always peddled by government, it is important for relevant government institutions regulating ASM to pay urgent attention to major impediments for ease of doing business. ASM is critical to ensure inclusive economic development hinged on mining because of its capacity to ameliorate unemployment challenges, capacity to tap mineral deposits that are not suitable for large scale mining, and capacity to stimulate community enterprise development. Below are several comments from gold custom millers which offers key insights on various impediments to ease of doing business in the ASM sector;

“We are willing to meet the minimum compliance requirements. However, we are being frustrated by various government institutions.”

“FPR put their keys on our boilers and if we want to add our carbons we end up waiting for 3 hours for them to come and unlock our boilers. Then when I want to elute, FPR officials again do not come on time to unlock our boilers citing shortage of vehicles or fuel.”

“Paper work in the Ministry of Mines, is taking ages. I have an elution permit and I requested for an upgrade so that I can offer services to others who are requesting the service. I have paid top up fees required.  But 1 year has passed, I haven’t received the permit.” Small scale gold custom miller

 “The Environment Impact Assessment (EIA) stakeholder consultation process is being abused for private gain by village heads, councillors and other powerful community member. It is more than a year now, but approval is still pending.”  

“We are over taxed. FPR collects royalties and Rural District Councils (RDCs) are also demanding royalties which are exorbitant. For example, Umguza RDC demands $10,000 annually from small scale miners. There is no need to pay royalties to RDCs because we are paying to FPR”

“The gold mobilisation technical committee is harassing us. There is confusion. One team comes and gives you certain instructions and the other team comes and says a completely different thing. We need a simple consolidated compliance book with all the laws that small scale gold miners are supposed to comply with”

“Chinese are here to loot big time and are protected by powerful individuals. They are not submitting gold to government at all. Gold custom milling should be reserved for indigenous people. Chinese should get the gold underground not the easy process on mining gold on the surface.” Small scale custom gold millers feeling the heat from competition with Chinese investments.

Reflection points for small scale gold custom millers

Foreign currency linkages from mining crucial

It is important to look at mining from a developmental lens as advocated by the Africa Mining Vision (AMV). A blueprint that was adopted by African Head of States and Government in 2009, with basic tenets of transforming Africa’s vast mineral resources into sustainable economic growth and broad based socio-economic development. In addition to taxes, artisanal and small-scale miners must understand that foreign currency linkages from mining are crucial. The country requires foreign currency to import essential drugs, inputs for manufacturing business, electricity and fuel among others. Farmers are getting 100% through bank transfers, teachers and nurses too. Large scale gold miners are getting 55% payment in forex. Mining, just like any other economic sector must also shoulder the burden of the country’s economic challenges. It is important though, for ZMF to play an oversight role to ensure transparency and accountability in the management of foreign currency to mitigate serious corruption risks.

Participation in local development planning a must

Small scale gold custom millers were encouraged to be familiar with the Constitution and compliance issues affecting their business. For example, Section 276 (2) (b) of the Constitution gives local authorities – RDCs included, “a power to levy rates and generally to raise sufficient revenue for them to carry out their objects and responsibilities.” Therefore, the issue of paying taxes to local authorities is a constitutional obligation. However, it is important for small scale gold custom millers to participate during local budget consultations to present their views on what is the fair amount that they should contribute.

More importantly, as key stakeholders in the local economic development, small scale gold custom millers must play an active role in the formulation and implementation of local development plans that affect them. If their voices are missing in the strategic plans for RDCs, then is becomes a bit tricky to influence budget processes. Custom millers can take advantage and object to the approval of the budget through the Minister of local government.

Tell your own stories and be the heroes

Out there, ASM is perceived negatively. Stories must be told on how ASM is contributing to local employment, gold production and foreign currency linkages and how income is used to provide education and health services. The socio-economic impact of closure of small scale gold custom millers is not known. Therefore, policy makers can easily get away without counting the costs.

There is power in mobilising

Small scale gold custom millers through their local association should approach RDCs to negotiate affordable levies. A leaf can be taken from Mberengwa and Bubi small scale miners association who successfully managed to negotiate annual fees payable by artisanal and small-scale miners in their districts. Mberengwa small scale miners association has a blasting license that can be used by its members. This way, the burden of paying $1000 to purchase and store explosive is spread amongst several players.

Paralegals critical in ASM

Compliance risks can threaten sustainability of any business activity. Large companies can afford legal secretaries. Entities like ZELA should work closely with ZMF and partner with a college to run a paralegal course specifically for the ASM sector. This will help to reduce incidence of harassment by compliance officers as the miners will have greater knowledge of their rights and compliance issues in general.

Is The Budget Forward-Looking On Effective Mineral Resource Governance?

Introduction

Shortly before the Finance Minister, Professor Mthuli Ncube delivered his maiden national budget statement in Parliament, Bulawayo city was showered with rains. The Bostwana Pula, a strong and stable currency which literally means rain, immediately came to mind. Was this a good omen for Zimbabwe? a mineral rich country like Botswana, but with sharply contrasting economic trends. All because Botswana not squandering the depleting opportunity to development from exploitation of unrenewable mineral resources – diamonds mainly. Yet Zimbabwe, replete with diverse minerals – diamonds, platinum, chrome, gold, coal and lithium among others, is under a resource curse. Mineral wealth is not translating to improved living standards for most of its citizens.

Considering that multiple mining mega deals announced this year (2018), creating a conducive policy environment to unleash the potential propulsive development effect of mineral wealth was a deal breaker for the 2019 national budget. Now that the budget statement has been delivered, the Zimbabwe Environmental Law Association (ZELA) is duty bound to analyse the statement using tenets of good mineral resources as a benchmark – the Africa Mining Vision. ZELA’s interest is compounded because submissions were made to Parliament portfolio committee on mines and mining development. The submissions were made on 22 October 2018 during a multi-stakeholder consultation on expectations for the 2019 national budget statement by the committee.

Reconciliation of pre-budget public consultations and the national budget statements

On inclusive approach to development, Section 13 (2) of the Constitution of Zimbabwe requires people to be involved in the formulation and implementation of development plans and programmes that affect them. Rightly so, pre-budget public consultations were done. In line with technological trends, use of social media to give a voice to citizens, the Minister of Finance took a step further by considering submissions made through social media – twitter, Facebook and blog.  Remarkably, the Minister has an active personal twitter handle @MthuliNcube.

The submissions made by ZELA during the public pre-budget consultations were mainly harvested from the Alternative Mining Indaba (AMIs), held at district, provincial and national level.  AMIs are multi-stakeholder platforms designed to strengthen solidarity and the voice of communities affected by mining. Therefore, mining affected communities have space to engage with stakeholders, government, Parliament and business on their concerns, largely Environment, Economic, Social and Cultural Rights (EESCRs).

Mineral revenue transparency                                      

During the pre-budget public consultations, we demanded that the budget must embrace the Extractive Industries Transparency Initiative (EITI) or resuscitate Zimbabwe Mineral Revenue Transparency Initiative (ZMRTI) – a home grown version of EITI which failed to take off in 2011. Transparency in the mining sector is fundamental to allow citizens connect the dots between mega deals and sustainable development and hold government and investors to account. Commendably, the 2019 national budget statement expressed urgent desire by government to join EITI. Behind the scenes, ZELA gave advice to the Ministry of Finance on the four steps required to join EITI. The Sign-Up Phase; The Preparatory Phase; The Disclosure Phase; and The Dissemination Phase. The sign-up step is the first phase in joining the EITI. It is the period when the Government must demonstrate its seriousness about the EITI by;

  • Issuing an unequivocal statement of its intention to support EITI implementation
  • Making a commitment to work with Civil Society and companies on EITI implementation. EITI is a tripartite arrangement including business, Civil Society Organisations and Government
  • Appointment of a senior individual to lead the EITI effort
  • Developing and publishing a costed work plan, with measurable targets and timeframes for implementation, and assessment of any constraints on the capacity of stakeholders to participate.

By expressing commitment to join EITI through the 2019 national budget statement, government has taken the first step. A long road lies ahead. But, as they say, a journey of thousand miles begin with a single step. It must not be lost that this is not the first time that government expressed commitment through national budget statements to embrace EITI or resuscitate ZMRTI without any traction. This time around, our enthusiasm is fuelled by our partnership with Parliament, especially, the portfolio committee on mines and mining development which requested a training workshop on EITI. Further, we have started to engage ZIMRA and Ministry of Finance on capacity building around EITI.

Below is a quick scan several media articles heralding our demand for transparency in the mining sector;

ZBC,08 November 2018, Enhance mining sector transparency, govt urged http://www.zbc.co.zw/govt-urged-to-implement-extractive-industry-transparency-initiative/; The Source, 09 April 2018, Who Stands To Benefit From The 4.2 Platinum Deal    https://source.co.zw/2018/04/who-stands-to-benefit-from-the-4-2bln-platinum- deal/; 263 Chat, Contract Transparency Critical To Enable Public Accountability In The Extractive Sector https://263chat.com/contract-transparency-critical-enable-public-accountability-extractive-sector/

 

Funds for a computerised mining title management system or mining Cadastre

Strangely, a country with development plans hinged on mining does is using an archaic mining title management system which encourages corruption and claim ownership disputes. Of course, transparency is viewed as toxic by policy makers who thrives on the opaqueness in the mining sector. By allocating $1,8 million and promising to prioritise foreign currency allocation for a computerised mining system, a foundation has been laid to bring sanity to the management of mining claims. We commend the Minister for the positive response to one of our key asks during the pre-budget public consultations.

Through ZELA’s participation in the mining Technical Working Group (TWG) on ease of doing business in 2017, the Ministry of Mines had indicated that $2 million is needed to fully computerise the mining title management system. Certainly, the budget of $1.7 million will go a long way to make the project feasible.  Through the Parliament portfolio committee on mines and mining development, the public must pressure the Ministry of Mines to ensure implementation of the computerised title management system. Tracking the disbursement of funds from the Consolidated Revenue Fund (CRF) to the Ministry of Mines and expenditure reports from the Ministry will indicate whether the programme is on track or not.

Sovereign Wealth Funds

The budget made a commitment to operationalise the Sovereign Wealth Fund (SWF). This Fund is important to allow intergenerational sharing of resources as required by constitutional principles on public financial management, Section 298 (1) (c). One source of resourcing the SWF is compliance with the obligation to allocated 25% of mineral royalties to the SWF. Monitoring income from royalties into the CRF and disbursement made to the SWF is one area that civil society must work together with Parliament on budget tracking.

Dealing with mining claims that are held for speculative purposes

Whilst we commend the Minister for the intentions to unlock Zimbabwe’s mineral potential to catalyse sustainable development, the budget fell short of meeting one of our demands on competitive bidding to dispose released claims. Competitive bidding brings transparency in the allocation of mining claims with huge mineral wealth potential, a critical mitigation to corruption risk. Further, competitive bidding creates opportunities for choosing an investor who offers a greater development dividend from mining – taxes, skills development, technology transfer, infrastructure and development of local supply chains. This year, Zimplats released nearly 24,000 hectares of platinum claims which were secretly transferred by government to Karoo resources without competitive bidding.

Accounting for tax incentives

As part of the Tax Justice campaign, ZELA sounded like a broken record on the need to weed out harmful over generous tax incentives which weakens government’s fiscal muscle from the exploitation of minerals.

Tax incentives Goxi

Extracted from GOXI weekly blog http://goxi.org/profiles/blogs/weekly-goxi-1

Therefore, ZELA is excited to note that the budget proposed “…… develop tax incentives monitoring and evaluation framework to facilitate the management of timed tax expenditures as well as to inform Cost Benefit Analysis of tax expenditures by Treasury, on an annual basis, with effect from 1 January 2019….” As illustrated by the table below, to be effective, the framework should factor in the discount factor to tax revenue brought by export incentives which have negatively discounted mining royalty income over the past two and half years.

Comparative analysis of mining royalties and mining export incentives

Export inentives hurt

Linkages between loans to ASM and environment rehabilitation

The budget statement called for linkages between funding to the Artisanal and Small-Scale Mining (ASM) sector from Fidelity Printers and Refineries (FPR) and Mining Loan Fund (MLF). Although the MLF is no longer operational, FPR has increased its funding from $20 million to $150 million this year.  Increased ASM gold output from 3.9 tonnes in 2014 to 19 tonnes from January to September 2019 is mainly attributed to funding from RBZ. Much as ASM is critical source of livelihood, the threat posed to the environment and sustainability of other socio-economic activities like agriculture is cannot be ignored. Innovation is key. RBZ runs an export incentive scheme for gold producers. This scheme can be adopted or adapted to come up with an incentive scheme for rehabilitation. RBZ can also provide critical rehabilitation equipment to key gold producing districts.

Conclusion

By embracing EITI, a world best practice on transparency in the mining sector; Allocating resources for a computerised mining title management system; Developing a framework to monitor and evaluate the cost and benefit of tax incentives and promoting linkages between funding to ASM sector; and Enhancing linkages between funding to ASM sector and environment rehabilitation, the 2019 national budget is certainly forward looking on effective resource governance. Implementation is key. Civil society and Parliament should play a critical oversight role to ensure implementation.

Auditor General’s Report: Accountability Issues for ZCDC

Conglomerate

Conglomerate diamond mining at ZCDC’s. Picture taken by Nyaradzo Mutonhori

The quest to bring improved transparency and accountability in the management of Marange diamonds – scandalously known for “missing $15 billion” birthed the Zimbabwe Consolidated Diamond Company (ZCDC). As the Zimbabwe Environmental Law Association (ZELA), an organisation with solid interest in resource governance, we are compelled to sift the latest Auditor General’s report to have a better understanding of how well or bad is ZCDC managed for the benefit of all Zimbabweans.  After all, Chiri, the Auditor General is famed for digging out publicly data exposing the rot in the management of State Owned Enterprises (SOEs). Her reports were quite revealing on ZCDC’s predecessor in Marange, the Zimbabwe Mining Development Corporation (ZMDC). Apart from sifting through the evidence provided by the Auditor General, the scope of this article covers audit areas that must be improved to hold to fully hold ZCDC accountable.

Stale audited report

Audited reports are an important health check on the performance of an entity. Mismanagement of resources, like any disease early detection, even better prevention is quite critical to ensure operational sustainability. Here we are in 2018, discussing audit findings from ZCDC’s 2016 annual financial report. A clear one-year unproductive fallow period, 2017, shows that we are dealing with stale information. This a clear violation of the Public Financial Management (Act).  The Act requires SOEs and government institutions to produce annual audited financial statements within six months after the end of each financial year. ZCDC’s predecessor in Marange, Zimbabwe Mining Development Corporation (ZMDC) was notoriously known for producing outdated audited reports.

Apart from the Auditor General’s findings, there is no public record of ZCDC’s income statement and balance sheet. Citizens, therefore, have been denied the opportunity to know pertinent information like how much income did ZCDC generate in 2016. Considering that Zimbabwe is well behind on mineral revenue transparency best practice, the public does not have a clue how well ZCDC’s performance regarding taxes – royalties, customs duty, withholding taxes and Pay As You Earn (PAYE) among others. The same information can easily be publicly mined for Caledonia’s Blanket gold mine in Gwanda courtesy of Canada’s Extractive Sector Transparency Measures Act.

ZCDC is in financial distress

The Auditor General noted that ZCDC Made a loss of $7, 445, 606, negative working capital amounting to $7, 981, 756 and a total negative equity of $7,445, 576. Even worse, ZCDC is owed $20,307, 027 by related companies – SOEs that have closed. A figure that could not be verified by the Auditor General. The fact that ZCDC’s owed $20 million by related companies shows that the mismanagement of SOEs is contagious. There is a huge risk that ZCDC could have been used as a conduit to milk public funds through propping up companies that have since closed.

Mine rehabilitation fund problematic

The “missing $15 billion” from Marange diamonds has attracted great public attention, overshadowing environmental issues, rehabilitation and mine closure. The Auditor General failed to verify the $11,068,975, a provision for rehabilitation of mines left by the companies that used to mine diamonds in Marange. ZCDC’s response was that an expert will be hired to establish the budget needed to rehabilitate the mines and funding will be requested from the shareholder – government. As a regulate and player in Marange diamond mining operations, the state should lead by example. Unfortunately, ZCDC is painting a different picture.

Poor corporate governance cited

The Auditor General noted the Audit and Risk committee and Human Resource and Remuneration committees were not constituted properly in line with best practice on corporate governance. The CEO and executive audit officer are part of the Audit and Risk committee, and the CEO and the human resource executive are part of the Human Resource and Remuneration Committee. A development that compromises the fundamental oversight role of such committees as well as bringing reputational risks. The President has repeatedly stated the desire to fight corruption, the scourge stifling Zimbabwe’s growth. This war cannot be achieved without good corporate governance.

Illegal diamond mining activities

The Auditor General’s report is silent on the widely reported illegal diamond mining activities in Marange. Such activities are a loss to ZCDC and ultimately, government. As part of audit preparations, the Auditor is required to gain an understanding of the context under which the entity that he or she is planning to audit is operating under. Recently, ZCDC announced that it is planning to empower the community through artisanal mining to curb illegal mining activities and attendant losses through smuggling of diamonds.

Business and human rights and the threat posed by synthetic diamonds

The business case, especially in the diamond sector is growing beyond profitability. Because diamond industry is all about global value chain systems, from mining, cleaning and sorting, marketing of rough diamonds, cutting and polishing, jewellery production and marketing, consumer behaviour cannot be ignored. Increasingly, diamond consumers are demanding that beauty of diamonds should be preserved by ethically sourced diamonds which deliver sustainable development to communities impacted by mining operations. The audit scope must have been broadened to include management of risks posed by failure of government and corporates to protect and respect human rights, and in case of violations to provide access to remedy – United Nations Guiding Principles on Business and Human Rights. Notably, ZCDC has been ordered by the high court not to arbitrarily displace communities as required by the Section 74 of the Constitution. Pressure on ethical sourcing of diamonds has been piled up by the emergence of lab grown or synthetic diamonds which do not carry the burden of human rights violation linked to mining.

Legal risks and arrangements with companies displaced to pave way for ZCDC

ZCDC’s creation was blighted with legal challenges, companies like Mbada Diamonds, Anjin and Jinan taking to disputes to the courts. ZCDC failed to carry out mining activities in the disputed concessions. Consequently, ZCDC’s ability to optimise diamond production for the country’s benefit was affected. Along the way, it was announced that government is not negotiating with the affected companies to resolve the issue amicably.  Parliament oversight lacked during these negotiations as required by Section 315 (2) (c) of the Constitution. On 20 April, during the field visit by EU delegation, ZELA observed that the Chinese were fencing off claims formerly held by Anjin Investments. It was clear that ZCDC was not involved from the brief that we received from ZCDC’s top management. The Audit report must have ordinarily been alive to legal risks and the status of disputes between ZCDC and the companies that were forced to close to pave way for the new arrangement – this is a sustainability issue.

Conclusion

For an entity that was established to promote transparency and accountability in the management of Marange diamonds, the Auditor General’s report shows a false start for ZCDC. The entity’s audited report is lagging by one year, there is poor corporate governance, and a company that is in financial distress lending $20 million to related companies that are now closed. The Rehabilitation and mine closure fund issue is a timely reminder to government, we cannot talk of counting the benefits without fully accounting for costs of mining. In the diamond sector, value addition is not only about cutting and polishing, but embracing the UNGP on business and human rights. Consumers want diamonds that are ethically sourced, and diamonds which deliver sustainable development to communities. Areas that ZCDC and government are found wanting.

Artisanal and Small-Scale Miners Making a Mark in 2019 National Budget Consultations

“I had a good presentation in Parliament. We are learning a lot from ZELA’s good initiatives” ZMF President

The Zimbabwe Miners Federation (ZMF) president, Henrietta Rushwaya appreciates the role that ZELA played to help the association to make solid submissions to Parliament concerning their views and proposals for the 2019 National Budget Statement. ZMF is a mother body of all artisanal and small-scale miners (ASMers) associations.

ZELA’s advice was rooted in outcomes from the district, provincial and national alternative mining indabas that are held annually. The indabas are multi-stakeholder spaces for ASMers to reflect on their practice and for influencing formulation and implementation of policies to steer responsible, sustainable and profitable growth of ASM.

Major issues included the 2019 National Budget include artisanal mining definition, a sector preserved for indigenous participation by the 2018 Finance Act.  The alignment of the Mines and Minerals Act with resource nationalism spirit of the Finance Act of 2018 through provision of a special permit for artisanal mining.

Differentiation of compliance costs for ASMers and large-scale miners to recognise the ability to pay. A necessary policy intervention in line with Section 13 (4) of the Constitution on national development which requires the state to put in place mechanism to ensure communities benefit from resources in their areas.

Currently, ASMErs and large-scale miners are required to pay uniform compliance fees. For instance, permits to purchase and store explosive which sum up to $1,000.

Funding meant for mechanisation of ASM from Chinese or other investors must be ring fenced to spur growth of domestic supply chains to optimise mining benefits through linkages. This is important considering that buoyant ASM gold production has not achieved transformational local socio-economic development. In 2014, ASM output stood at 3.9 tonnes and in the first 9 months of 2018, ASM contributed 19 tonnes.

The budget must allocate resources for research, development and innovation for cheaper and easy to use alternatives to mercury, a key menace to health and environment as recognised by Minamata Convention.

Command agriculture funding must target water linkages between mining and farming to promote integrated and sustainable rural socio-economic growth. ASMers are confronted with dewatering challenges and farmers need water to irrigate their crops to cushion themselves from unreliable rain fed agriculture. Harnessing water linkages between mining and farming will also help to mend strained farmer-miner relations.

Working with ASMers associations to participate in formulation and implementation of polices that affect them is at the heart of ZELA’s intervention to ensure direct community benefit from their resources. As ZELA, we are therefore proud that, our efforts are being recognised and appreciated by ASMers.

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