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Mukasiri Sibanda's Blog

articles on mineral resource governance

Analysis of the 2018 monetary policy statement: a focus on mineral export incentives

  • RBZ’s export incentives from 05 May 2016 to 31 December 2017 sterilised mineral royalty revenue by a discounting factor of nearly 86%. This obviously hurts the government’s desire to create fiscal space, when revenue generation is constricted my toxic incentives

Themed “Enhancing financial stabilisation to promote business confidence” is the 2018 monetary policy statement tooled to support mining sector led contribution to socio-economic development? This monetary policy was crafted in the context of cash shortages that chocking the ASGM formal trade; RBZ gold support fund, although a welcome development, it is only benefiting a few and there is no clarity on how men and women are benefiting from the fund; moratorium to facilitate recoupment of externalised money and assets; ballooning government debt crowding private sector access to capital; and complaints by Civil Society Organisations (CSOs) that export incentives have sterilised mining royalties. This articles specifically focuses on rationality of the export incentive scheme concerning mining. It builds on two prior articles- How Helpful or Harmful is RBZ’s MINING Export Incentive Scheme and Does RBZ’s Export Incentive for Mining Need a Re-think .

To stimulate export earnings, RBZ introduced a 5% export incentive scheme in May 2016. Mining as the largest exporter automatically became the largest beneficiary of export incentives. During public pre-budget consultations, CSOs like ZELA raised concern that export incentive in the mining sector have sterilised mineral royalties. Furthermore, export incentives are an unnecessary sweetheart deal to a sector that largely exports raw minerals. A sector whose resource base is finite which treasury and civil society accuse of not fairly contributing to development finance, illicit financial flows are a major concern.

Cumulative export receipts and incentives amounts (05 May 2016- 31 December 2017)

Sector Export Receipts (USD) Incentive Amounts (USD) Bond Notes Issued to Banks (USD)
Mining excluding gold $2,645,809,356 $58,268,089 $56,000,000
Gold producers $1,282,023,093 $59,313,208 $59,200,000
Totals $3,927,832,449 $117,581,297 $115,200,000

Extracted from the 2018 Monetary Policy Statement page 8

From the above table, the mining sector received export incentives amounting to $117,581,297 from 05 May 2016 to 31 December 2017. Looking at annual revenue performance reports produced by Zimbabwe Revenue Authority (ZIMRA), the only distinct mineral revenue stream is royalty income. In 2016 and 2017, mineral royalties’ contribution was $62,901,509.54 and $136,013,3018.23 respectively, amounting to $136,013,3018.

Considering that mining sector received $117,581,297 as export incentives from 05 May 2016 to 31 December 2017 and paid $136,013,308.23 mineral royalties almost in the same period, January 2016 to 31 December 2017, in real terms, mining paid mining royalties amounting to $18,432,011.23 as royalties. Effectively, mineral royalties were discounted by nearly 86% if we factor in export incentives. Royalties are a reliable and predictable income stream which is less sustainable to tax evasion and tax avoidance unlike profit based taxes. RBZ’s move to sterilise mining royalties hurts government’s fiscal abilities to finance service delivery from the country’s huge mineral wealth endowment.

According to RBZ, the rationale for export incentives is to drive export earnings. In the mining sector, export earnings can be boosted by several factors which include either price or production increments or a combination of the two. Also export earnings can be boosted by mineral value addition and beneficiation and access to capital among others.  The monetary policy contends that world commodity prices for base metals and precious metals are firming, platinum being an exception. A positive development on export earnings which is not related to export incentives.

Ferrochrome production has spiked mineral export earnings, the lifting of the ban on raw ferrochrome exports is the main driver increased production in addition to favourable market prices. Gold, the lead export earner in the mining sector is anchored by Artisanal and Small-Scale Gold Mining (ASGM) whose production has eclipsed large scale miners in 2017.  ASGM accounted for 53% of the country’s total gold production, 24,843.87 kgs.  A combination of factors can be credited for this success story. The “no questions asked policy on gold deliveries” and RBZ’s gold production support fund are some of the prominent factors. $74 million was disbursed to 255 small scale gold miners in 2017 and RBZ has doubled the fund in 2018 at $150 million.

If the above factors are to be considered, RBZ must surely come up with a sensible justification on how the incentives scheme in the mining sector has boosted mineral production. Failure to access cash at the bank is rapturing trust between ASGM and government, a condition that festers illegal trade of gold. RBZ pays 70% cash in form of US dollars and 30% through a bank transfer or bond notes, the latter getting a 5% premium. The export incentive regimen will continue according to RBZ. Gold export incentives have been increased to 10%, but without addressing persisting cash shortages, more gold in the ASGM will find its way to the black market which is prepared to pay 100% cash in foreign currency.

The drive to boost exports through incentives can better be addressed by a progressive export incentive regime. Exports of raw minerals should not be rewarded, but with increased mineral value addition, the export incentives accruable to the mining sector should also increase. As it stands, there seems to be policy discord, on one hand government is incentivising miners for exporting raw minerals. And on the other, government has export taxes to discourage the beneficiation of raw minerals. Minerals are a finite resource.

The opportunity to garner taxes to fund social service delivery will not last forever. It disheartening to note that RBZ has discounted mineral royalty revenue by 86% for the past 2 years. To finance the Sovereign Wealth Fund (SWF), 25% of mineral royalty revenue was ear marked for this exercise. RBZ’s puts into jeopardy intra and intergenerational of mineral wealth, a violation of constitutional principle on public financial management.

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An ear to the ground: artisanal and small-scale gold mining in the new dispensation

Chigayo gold.jpg

Mining has played an economic shock absorber role, never mind the squandering of Marange alluvial diamond wealth. The Artisanal and Small-Scale Gold (ASGM) sector which has recently eclipsed production of large scale miners has been instrumental, not only in earning the country much needed foreign currency, but creating employment and income generating opportunities for over half a million people directly.

A compelling case is made for ASGM as a front door way of empowering poor but resource rich communities. Certainly, ASGM has its ugly side. Negative externalities like damage to the environment, disrespect for property rights, violence, alcoholism, spread of diseases, injuries and deaths, all deserves to be mitigated to better account for ASGM benefits.

Repeated calls have been made by the new government that Zimbabwe is now open for business, what opportunities and challenges does this policy direction mean to ASGM sector? A new Minister of Mines with strong mining industry background is now in charge, will he be pro large-scale mining or be considerate to ASGM? from the architects of command agriculture, is command mining on the cards? How government is fairing on curbing illicit financial flows with ASGM production eclipsing large scale miners? And given the unsustainable nature of ASGM, is diversification of rural economies a priority? The following ten points helps us to have a pulse feel of ASGM in the new dispensation.

Foreign direct investment and ASGM

Government has made attraction of Foreign Direct Investment (FDI) in the mining sector a priority in its quest to enhance economic revival. Attraction of FDI in the mining sector is closely linked with large scale investors who may view growth of ASGM as a threat. An expression of interest has been published by Ministry of Mines which include investments into the Zimbabwe Mining Development Corporation CZMDC)’s gold assets, Jena Gold Mine in Kwekwe and Evington in Chegutu. Taking advantage of ZMDC’s moribund operations and vast idle claims, ASGM is thriving in these areas. Artisanal miners have pinned hope on government to reallocate some of the unutilised gold claims owned by ZMDC, including other large-scale miners.

There is an inherent risk that government’s inclination to attract FDI may lead to the displacement of ASGM. If not handled well this can cause conflict and threaten a way of livelihood for many people residing in rural areas. With the impeding drought this year, predictably, ASGM will attract more players in rural areas.

New Minister of Mines with Large Scale Mining DNA

To make an impression on investors, a new Minister of Mines with a solid mining industry background was appointed. Honourable Minister Winston Chitando is a former executive chairman of Mimosa platinum mine, equally owned by Implats and Sibanye, both listed at the Johannesburg stock exchange. So, the Minister may have a soft spot for large scale mining operations but he must avoid playing “step mother” to the ASGM sector. Without a doubt, large scale miners offer less administrative burden when compared to ASGM.

That said, ASGM is not a matter of impressive macro-economic indicators disconnected from livelihood of many people residing in resource rich areas. When large scale miners exxperience windfall revenues, evidence of increased community purchasing power is barely notoceable. Along with agriculture, ASGM is the nerve center for rural economies who are susceptible to climate change risks, droughts and floods.

It is noteworthy to say the Mimosa platinum mine has been exemplary though their Corporate Social Investments (CSIs) by providing equipment support to ASGM in Zvishavane and Mberengwa. In 2015, Mimosa donated compressors, jack hammers and a vehicle to Zvishavane- Mberengwa small scale miners’ association to the tune of $150,000. Hopefully, Chitando who was at the helm of Mimosa during that time can use his newly acquired influence to spur greater cooperation between large scale miners and ASGM.

Softening of indigenous laws in the mining sector

The indigenisation requirement for ceding at 51% equity to indigenous partners is set to apply only to platinum and diamond sectors. Without considering its effectiveness on the ground, ideally, indigenisation seemed to have a better package for empowering resource rich communities through Community Share Ownership Trusts (CSOTs). Mining companies were required to cede 10% equity to communities around mining areas. However, only two out of sixty-one established CSOTs were given share certificates – Gwanda and Umguza rural districts. According to the National Indigenisation and Economic Empowerment Board (NIEEB), $39 million has been paid to CSOTs as seed capital. 3 platinum mines anchor contributions with a combined total contribution close to $30 million,

Restricting indigenisation to platinum and diamond sectors leaves government with pressure to come up with empowerment strategies for resource rich communities. There is no need to reinvent the wheel. Formalising ASGM is a front door way to empower directly over half a million people who are engaged in the sector. It would be highly regrettable for government, after scrapping softening of indigenous laws, to side step ASGM in its policy interventions in the mining sector. Already small-scale miners in gold and chrome sectors are being squeezed out mainly by Chinese nationals. In Bubi, the Chinese owned custom milling services have taken business away from indigenous millers. Government must deliberate consider limiting foreign participation in the ASGM sector and help the players to acquire appropriate technologies.

African Mining Vision and ASGM

Government has shown willingness to reform. Although it has its own faulty lines, the African Mining Vision (AMV) agreed to by the African head of states in 2009 offers a framework that countries can customise. AMV recognise ASGM as an indispensable sector, which must co-exist with large scale miners because some deposits are not economically viable for large scale mining. Furthermore, ASGM can be an integral part of rural economies as it can potentially stimulate growth of within and beyond ASGM supply chain opportunities.

As government moves to reform the archaic and colonial Mines and Minerals Act, it is important recognise artisanal mining through a special permit which enables easy of doing business for poor communities whose livelihoods have been criminalised. The Ministry must leverage of the work done by the mining Technical Working Group (TWG) on ease of doing business which came up with proposed terms and conditions for a special mining permit for artisanal mining.

Curbing Illicit Financial Flows Linked with ASGM

Informality and economic lucrativeness have conspired to make ASGM susceptible to illicit financial flows (IFFs). To stifle side marketing of gold, government must address cash shortages which make it difficult for artisanal miners to access the 30% payment through bank transfer or bond notes. The other 70% payment is made in cash – US dollars. Broadly, foreign currency shortage has elevated the significance of gold as a substitute currency to US dollars.

Businesses resort to buying gold which is highly liquid in countries like South Africa to finance importation of goods and services when they fail to access foreign currency. Although production of ASGM has outstripped large scale producers, government must not be blind folded by this success, a lot more must be done to curb syphoning of gold from the official market

Claim Ownership Disputes and Mining cadastre

High levels of corruption and outdated mining title management system have triggered numerous claim ownership disputes. This is affecting ASGM production. Prominent women miners in Matebeleland South have stopped mining for 2-3 years because of claim ownership disputes. Normally, ownership disputes are tied to rewarding mines. Government must urgently prioritise resources for a computerised and open title management system to enable transparency and accountability.

From the architects of command agriculture, is command mining on its way

For a long time, players in ASGM have been envious of government’s mechanisation and input support to agriculture. Now that Mnangagwa is the President, the champion of command agriculture, a man deemed to have a soft spot for ASGM, expectations have ballooned for a command mining scheme. President Mnangagwa has strong roots in Kwekwe, a town whose economy is pivoted on ASGM.

Interestingly, Zimbabwe Artisanal and Small Scale for Sustainable Mining (ZASMC) president, Engineer Murove, has compiled a blue print on command mining. Expectations are that government will roll out mechanisation and input support to the ASGM sector like command agriculture to boost gold production, ease the foreign currency shortages, create employment and stimulate community enterprise development.

Environment management

Widely known for its poor environmental management practice, the regulators have not been helping matters either through imposing burdensome Environment Impact Assessments (EIAs) to ASGM. It is heartening to note that the Environment Management Agency (EMA) is moving in the positive direction to enhance formalisation of ASGM through tailor made environmental regulations. Lessons can be learnt from Tanzania, a country with simplified environmental regulations for ASGM.

Technical capacity building for ASGM

Learning institutions like School of Mines, University of Zimbabwe and Midlands State University have commendable programmes for equipping players in the ASGM sector with skills to improve mining and mineral processing methods. Because of the huge demand, the is need for civil society players to innovate in order to address the yawning skills gap particularly for women miners. For example,the Zimbabwe Environmental Law Association (ZELA) is in the process of setting up a professional club for women in mining which will be carrying outreach visits to women miners from time to time.

ASGM is not a sustainable economic activity

By nature, minerals are finite resources. Hence economic gains from mining, ASGM included are not sustainable unless revenue generated from mining is reinvested into productive sectors of the economy like agriculture and manufacturing. It becomes fundamental to come to encourage innovative savings schemes and community enterprise development exploiting both ASGM supply chain opportunities and diversification of rural economic activities.

Some positives can be seen already. In Shurugwi, a small-scale miner has diversified into hotel and catering services. It is common for players in the ASGM invest in cattle and farming activities. Largely, gold producing areas are famed for consumptive expenditure, luxury cars and alcohol. Wealth is often squandered. Stakeholders, government, civil society and business must join hands with players in the ASGM sector to promote a sector which is an integral part of rural economies as envisages by the AMV.

Conclusion

Formalising ASGM presents great opportunities for government to comply with the constitutional requirement that mechanisms must be put in place to ensure communities benefit from resources in their areas. This becomes more pressing considering that government has moved to soften indigenisation framework for all minerals, except for platinum and diamond.

Government must break away from urgently from colonial Mines and Minerals Act and recognise artisanal mining through a special permit as recommended by the Mining TWG on ease of doing business reforms. Since some mineral deposits are not viable for large scale mining, there is room for having ASGM as an integral part of the mining sector as encouraged by AMV.

Of course, formalising ASGM goes beyond legalistic measures, that is why government must be at the fore front of promoting mechanisation of the ASGM sector and provision of scarce finance. We must not lose sight though that ASGM is not sustainable, so initiatives to enable diversification of rural economies must be prioritised soon rather than later.

Report on Mines and Minerals Bill held on the 19th and 20th January 2018 at Leopard Rock Hotel, Vumba

By Malvern Mudiwa, Marange Development Trust (MDT) Chairman

The workshop was hosted by the Chamber of Mines. Several stakeholders participated at the workshop and these included the Ministry of Mines led by the Minister Hon. Winston Chitando , Chamber of Mines, Fidelity Printers, Zimbabwe Mining Federation, Speaker of Parliament, Honorable Advocate Jacob Mudenda, Parliamentary Portfolio Committee on Mines , ZCDC Board and staff led by the Chief Executive Officer, Dr. Moris  Mpofu , Rio Zim, EMA, Small-scale miners, the Manicaland Provincial Minister,  Hon. Monica Mutsvangwa, and Marange Development Trust, represented by its Board Chairman, Malvern Mudiwa

In his keynote address, the Speaker of Parliament, Advocate Jacob Mudenda, emphasized that the Bill must sail through no later than 31 March 2018 and he expressed his commitment to see it through. He pointed out that Parliament must facilitate community involvement. He also queried why certain stakeholders were not involved in such an important occasion such as Civil Society Organisations, experts from the University of Zimbabwe’s Department of Geological Survey, and the Attorney General’s Office who gives guidance to Government on technical issues. He also talked about the absence of exploration data which ascertain the quantity of mineral resources 37 years after Independence; hence the need to invite researchers from the University of Zimbabwe.

 Another issue of great concern which Adv. Mudenda talked about was that of the President who is globetrotting without looking at the importance of including Parliamentary Portfolio Committees.  Illicit financial flows were another issue that needed urgent attention. The Speaker emphasized on mining houses to seriously look into ploughing back into the communities. He talked about the need to scrutinize mining policies.  In his own words, the Speaker submitted that “there was no robust mining policy”, citing the example of Mutoko where the Black Granite is mined, but where there is a trail of destruction and land degradation. He quoted section 13 of the Zimbabwe’s Constitution which outlined goals of national development.

Concerning the issue of Community Share Ownership Schemes (CSOTS), his observation was that it was marred by corruption. Certain people took advantage of loopholes since there was no law which compels mining houses to contribute towards CSOTS. These corrupt people went to the extent of fooling even the highest appeal of the land, the President, to display a dummy cheque of US$1,5 million and still getting away with it.

The next presenter was the Minister of Mines and Mining Development, Hon. Chitando. He talked about challenges that are being faced by many mining companies in the country. Among them is Hwange Colliery which he says is operating below capacity. However, he said there are noticeable positive changes given the production statistics. Among other factors, he cited overheads as the biggest challenge the company is facing. Hwange Colliery draws water from the Zambezi River. Such things as the maintenance of road infrastructure in Hwange, the refurbishment of the hospital and staff houses as well as the mortuary should be addressed. Its workforce stands at 2000 workers. Nickel prices were said to be firm while diamond production levels were equally encouraging. Since the taking over of mining operations by Government to form ZCDC there are signs of progress according to the Mines Minister  ZCDC produced 3 million carats in 2017 with an anticipated production of 4 million carats at the completion of the conglomerate plant that is under construction. He talked about the need for value addition on diamonds, and the need to put up a cutting and polishing plant.

JENA MINE- The Minister said it is in a sorry state regardless of being funded, it never improved. He suggested that maybe it was underfunded, He proposed 20 million bail out. The mine is currently producing 10 kg per month compared to 40 kgs during its peak production period

GOLDEN COPY MINE- Highly prospective no much information.

KAMATIVI-  Contains 1,4 billion of Lithium, progress underway to resuscitate the Mine.

SHABANI –  Mashava Mine test works on the Dumps in progress reprocess of the dumps which can reinvent ZMDC.  

Special Grants Applications

The Minister expressed commitment to ensure that all applications are responded to within a reasonable time frame. He wants to move away from a tradition of sitting on or ignoring applications

Environmental Rights        

The Minister said he was worried by the level of environmental degradation in mining areas. He also noted that there was a total disregard of environmental issues perhaps because ‘we allowed it to happen’.


   Easy of doing Business     

There is no conflict of interest.  The Ministry subscribes to it though they have their own way of doing business.

 The Permanent Secretary in the Ministry of Mines, Mr Munesuishe Munodawafa, presented the objectives of the meeting.

The Chairperson of the Portfolio Committee on Mines and Mining Development, Hon. Temba Mliswa, acknowledged the effort that was put by the former Chairperson on the Mines Committee, Daniel Shumba, who was unfortunate to see the fruits of his efforts. He told the delegates that he met with the President who wants to see the Bill issue done without fail. He also shared the same sentiments with the Speaker of the House of Assembly on the absence of the Attorney General and Civil Society Organisations at this important workshop. The Chairperson gave showers of praises to the new Minister of Mines for recognizing the role of Parliament as compared to his predecessor. He also shared the importance of exploration and time-frames which he said was very critical.  As a nation, we should know at least what we are sitting on, and this called for sound Indigenization laws.

                                   Roles of Permanent Secretaries

There were many contentious issues that were raised during the public consultations. Some of them were the composition of the Mines Affairs Board, particularly on the role of the Secretary of Mines. Parliament is currently considering a new Bill known as the Public Entity and Corporate Governance Bill. This proposed law seeks to address the role of Permanent Secretaries in relation to Boards and Parastatals under their ministries. The Bill further seeks to address issues of good corporate governance, accountability and transparency, among other key result areas. The Mines Committee and Energy will have under consideration some of the provisions in that Bill, in order to improve on the Mines and Minerals Amendment Bill.

Impacts Associated with the Introduction of the Cadastre System

·       The target areas included artisanal small-scale mining;

·       Whether the Bill will be able to address the farmer-miner relations;

·       The impacts of ‘use it or lose it policy’, particularly on large-scale producers who own numerous claims. There was extensive debate on this subject;

·        The restrictions placed on riverbed mining and the impact they have on artisanal and small-scale mining. The argument was that the Government banned riverbed mining by artisanal miners at the same time offering the same to the Chinese companies.  This was taken note of for consideration by the Ministry;

·        The Bill does not fully recognize artisanal and small-scale miners, yet they play a significant role, particularly in the gold sector. For instance, in 2016 alone, they contributed almost 40% of total gold deliveries to Fidelity Printers and Refineries. All parties were in agreement in this section;

·       Conflicting laws, particularly the one on the Safety, Health and Rehabilitation Fund being proposed in the Bill and the Environmental Fund, administered by the Ministry of Environment, How will such provisions be reconciled? The ministry took note of it and is subject for consultations and advice since the Minister concurred;

·         On mining disputes, the Bill is silent on timeframes for resolving these, yet the industry has many outstanding disputes;

·       Some of the penalties proposed in the Bill are too harsh and outrageous. For example, a breach on riverbed mining can lead to imprisonment for a period of not less than 10 years, yet poor and ordinary people in rural areas depend on riverbed mining for their livelihood. On this one, again, the ministry was in agreement, subject to further consultation.

·       The unclear reasons behind the classification of the strategic minerals were discussed. There was a debate on which minerals must be strategic minerals. They all agreed that it must be referred to the AG’s office for the definition first.

In summary, most issues raised by the Parliamentary Committee were agreed upon. It was hoped that by end of February 2018, the Bill will sail through.

                                                      Sidelines Meetings

I had the opportunity to have some discussions on the sidelines with the ZCDC Chief Executive Officer, Dr. Moris B. Mpofu in which we exchanged notes on various issues among them, security in and around the diamond mining areas, where communities are subjected to all sorts of abuse from dog bites, physical beatings, and shooting of harmless people, to mention just but a few. We proposed to have community involvement on trying to find a lasting solution to this problem. Also on discussion was the issue of community income-generating projects. Small-scale irrigation schemes were suggested and efforts to implement the proposal were already at an advanced stage.

I had the opportunity to raise the issue of Tinoengana village on the subject of water and cattle dip tank which was vandalized by mining activities. It needs urgent attention which he took note of and promised to attend to it.

I was fortunate to have some discussions with the Minister of State for Manicaland Provincial Affairs, Hon. Monica Mutsvangwa, and we shared some notes. This brings me to the end of this report.

If I were Zimbabwe’s Minister of Mines

Great piece from Gilbert, it is important that citizens but document and share their ideas on how to move forward on national socio-economic development hinged on the country’s vast mineral wealth.

RESOURCE FUTURE ZIMBABWE

He is handling such an important Ministry. One that has been dogged by controversies and allegations of corruptions. There are a lot of things that the new Minister of Mines and Mining Development could do- but he does not have much of a runway  (till the 2018 elections) to do everything that needs to be done. There is investor interest, geo-surveys, production capacity, skills, energy, taxation regime, property rights, transparency and accountability. It is a lot- he will have to prioritise and focus more on addressing the regulatory aspect, legacy issues and capturing as much resource rents from current operating mines as possible.

If I were Winston Chitando this is what I would do in the next 100 days;

  1. Put a moratorium on new mining deals or investments until after there is clarity on the mining legal and policy framework. With the time-frame- in the run up to the new…

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2017 Annual state of the Artisanal and Small-Scale Mining Report and 2018 Outlook

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By Mukasiri Sibanda and Munyaradzi Hwengwere

The Artisanal and Small-Scale Mining (ASM) sector has gained world attention for its potential to transform lives of impoverished but resource rich communities. Largely informal, very little is publicly known about the ASM sector. Often, the public is quick to judge artisanal miners based on negatives-environmental degradation, violence and spreading HIV and AIDS. Policy makers are sometimes guilt of failure to align their policy and practice reforms with what is happening on the ground.  Positives from ASM are a blind spot to many.  For example, medicines, fuel, raw materials for industry and other imported goods are being powered by gold mainly from the ASM sector. People’s lives are being transformed in rural areas and the stories are untold. Directly, the ASM sector support around 500,000 people and 3 million people indirectly. Yet what dominates in most news headlines are news of unsafe and irresponsible mining practice and murders. Policy makers have been accused of aligning their policy and practice reforms with what is happening on the ground.

Cognisant of the power coming with innovative products to enable the realisation of the African Mining Vision (AMV) ASM goal: “To create a mining sector that harnesses the potential of artisanal and small-scale mining to advance integrated and sustainable rural socio-economic development” an Annual State of the ASM Sector Report and 2018 Outlook will be produced. The report is coming at an opportune time when ASM gold production has outpaced primary gold producers.

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Sometimes there is no need to reinvent the wheel.  The Chamber of Mines of Zimbabwe (CoMZ) for example, annually produces a report on state of the mining industry report. Mainly, the CoMZ report covers performance of the mining sector on areas like mineral productions, contribution to the fiscus, challenges facing the industry, linkages and beneficiation, safety, health and environmental issues, fatal accidents and perception on policy among others. Much as the CoMZ report is an important source of public information on what transpired in the mining industry in the past year, the ASM sector is barely covered.

Since the Annual State of the ASM sector is being produced for the first time, a stakeholder sensitisation meeting has been pencilled on Thursday, 11 January 2018 at Jameson hotel. Invited stakeholders from government side include Ministry of Mines and Mining Development, Ministry of Finance, Fidelity Printers and Refiners (FPR), Environment Management Agency (EMA), Zimbabwe Republic Police (ZRP) minerals and boarder control, Mineral Marketing Corporation of Zimbabwe (MMCZ), National Social Security Authority (NSSA) and the Standard Association of Zimbabwe (SAZ). Private sector players mainly banks, suppliers of equipment and consumables are also invited. Development partners and civil society organisations, media and skills development institutions have also been roped in.

Basically, the sensitisation meeting will seek to harvest ideas from various stakeholder groupings on how to enhance the value proposition for the Annual State of the ASM Sector Report. Further, discussions are going to zero in on how information will be collected from different stakeholders and key milestones for producing the report. Government institutions will be tasked with compiling key policy and practice reforms for 2017 and what to expect in 2018 as well as challenges and opportunities in the ASM sector. Other stakeholders will also share their key products and services introduced in the past year and expectations for 2018. The media will compile key stories that shaped the ASM sector in 2017 as well as their expectation for 2018.

Zimbabwe Miners Federation (ZMF) will produce the report with support from Zimbabwe Environmental Law Association (ZELA) and Mejrkh Media Advisory and Consultancy. Formed by the Ministry of Mines, ZMF is the umbrella board for all artisanal and small-scale miners’ association in Zimbabwe.

ZELA is a lead organisation on mineral resource governance which has been quite active in 2017 supporting artisanal small-scale gold miners through several activities; multi-stakeholder dialogue on ASM at local, provincial and national level; a skills development training for women in ASM; Gender Based Violence in ASM sector, input during national budget consultation process  and work on proposed artisanal mining special permit along with other activities.

Mejrkh Media Advisory and Consultancy, is knowledge based company with a wide range of expertise in both large scale mining and ASM sector. The company is behind the annual Mining and suppliers Handbook and Minex and Mining Media Awards.

Mineral revenue transparency reforms: Priorities for the new government

Yikho Phela

Under the auspices of “Operation Restore Legacy” led by the military, a new transitional phase has been ushered in Zimbabwe. Government has publicly shown its policy intentions to grow the economy, revamp public service delivery and to fight dogged corruption. As the country is endowed with vast mineral wealth, civil society must not miss this opportune moment, to engage government on critical enablers to make mineral wealth anchor “sustainable economic growth and broad based socio-economic development” as contemplated by the African Mining Vision (AMV).

Apparently, this new window of opportunity may not last long, in the next 7 months or so, new elections are to be held if all goes according to the book. Therefore, civil society must engage government on quick wins or low hanging fruits that can transform the landscape of mineral revenue transparency and accountability in Zimbabwe. Mindful of this narrow window of opportunity, this discussion paper is tailored to; (i) galvanise  aggregate public demand for improved transparency and accountability in the management of mineral resources, (ii) to  give traction to multi-stakeholder policy and practice reform dialogue to ensure mineral resources are well managed for the benefit of all Zimbabweans, and (iii) to better focus policy makers on critical areas that require urgent attention to attract much needed “responsible investments”, to curb corruption and deliver socio-economic development hinged on mining.

Attracting Foreign Direct Investment (FDI) is one of government’s main priorities as highlighted in the 2018 national budget statement[1] and the State of Nation Address (SONA), 20 December 2017.  In so doing, some policy interventions have urgently been carried out, in the process undermining transparency and public participation, cornerstones of public accountability which augurs well for “Operation Restore Legacy.” Indigenisation requirement of 51/49 equity in the mining sector was scrapped except for platinum and diamond sectors. Host mining communities, who bear the brunt of mining, were not consulted. They are in the dark as to operationalisation of Community Share Ownership Trusts (CSOTs) outside platinum and diamond mining areas. Likewise, mining workers set to benefit from Employee Share Ownership Schemes (ESOS) have been affected.

Whilst government is under pressure to turnaround the economy through attracting investments, the risk of festering a “resource curse” increases as bad mining agreements can result if the fast-tracking approach is taken. Lessons can be drawn from Marange diamond mining activities in which minerals rights were parcelled without economic consideration of the value of diamond reserves, investors failed to meet required capital contributions, exploration, a life blood of any mining activity was not done and anticipated $50 million to the Marange Zimunya CSOTs failed to materialise amongst other host of challenges. Another case of poor mining deals is the 2.5% royalty stabilisation clause for Special Mining Lease Agreements (SMLA) involving platinum houses which undermined the Public Financial Management Act (PFMA) royalty rates currently pegged at 10%. If well managed, the country’s mineral assets can be a good leverage for Domestic Resource Mobilisation (DRM) to finance development. Avoiding overgenerous tax incentives is a low hanging fruit for DRM. This will ease government pressure to borrow development finance from International Financial Institutions (IFIs).

Ongoing policy reforms like the Mines and Minerals Amendment Bill (MMAB) offers opportunity for government to entrench public disclosure and performance monitoring of Mining Agreements (MAs). This will fulfil Section 315 (2) (C) of the Constitution which requires transparency, cost effectiveness and competitiveness in negotiation and performance motoring of MAs.

Considering that the country is opening to investors, there is urgent need to review various Double Taxation Agreements (DTAs) to mitigate against abuse which can harm the DRM initiatives. DTAs are entered between countries to facilitate cross border investments by making sure income generated by individuals or corporates is not taxed twice. Nonetheless, DTAs can be abused through treaty shopping and permeant establishment definitional issues. According to International Tax Blog, “treaty shopping generally refers to a situation where a person, who is resident in one country (say the “home” country) and who earns income or capital gains from another country (say the “source” country), is able to benefit from a tax treaty between the source country and yet another country (say the “third” country).  This situation often arises where a person is resident in the home country but the home country does not have a tax treaty with the source country.”

Permanent establishment risk can be managed according to PwC when “the permanent establishment (PE) threshold test is contained in many countries’ domestic tax laws and double tax treaties. It determines whether a business has sufficient activity in another territory to create a taxable presence in that other territory from a corporate tax perspective. While multinational groups may have found that PE issues were not a key area of focus for many tax authorities in the past, this position is now changing in light of the OECD’s proposals outlined in Action 7 of the Base Erosion and Profit Shifting (BEPS) project, which relates to addressing the perceived artificial avoidance of PEs by multinational corporations.”

Mining, unquestionable is intertwined with the country’s development prospects as evidenced by its principal contribution to much needed foreign currency earnings and its potential tax contribution and development of within the mining value chain and beyond the mining value chain. It is mindboggling that the country does not have a computerised and open mining title management system. The tender for the mining cadastre was flighted in 2014 and the tender was awarded to Spatial Dimension in 2016. To date, there is hardly any evidence that the open and computerised mining cadastre will be operationalised. There are many claim ownership disputes cause largely by corruption in the award of mining claims. Certainly, such risks are not good for attracting foreign or domestic investment in the mining sector. The Artisanal and Small-Scale Gold Mining (ASGM) sector critical to the country’s agenda to increase foreign currency earnings and to community empowerment is reeling from mine claim ownership disputes. A red flag on mining disputes was raised by women in ASGM during the 16 days of activism against Gender Based Violence (GBV).

Beneficial Ownership (BO) is a critical dosage to fight corruption in the award of mineral and mining operation or investments. Without knowing of the natural persons that are profiting from mining deals, initiatives to curb corruption will have limited success. Whilst disclosure of interest is important in public or private procurement, knowing the real beneficial owner of the deal is a game changer to avoid corruption, transfer pricing abuse and tax evasion. It is a matter of public interest to know whether the new Minister of Mines and Mineral Development (MMMD), Wiston Chitando, a former executive chairman of Mimosa Platinum Mining company, is a beneficial owner in Mimosa mines’ operations through equity or procurement deals. Similarly, there is strong public speculation that Mnangagwa, the president, has vast business interests which also covers the mining sector.

With BO disclosure, transparency and mutual public trust can be built to enable policy makers to operate without unnecessary speculation fuelled by social media on potential conflict of interest. Equally so, BO can have impact in other sectors of the economy including stemming wanton corruption in public procurement contract. A quick win in the mining sector to implement beneficial ownership lies in the finalisation of mining cadastre that includes an online registry beneficial ownership of mining claims. In addition, BO on a multi-sectorial approach can be carried out through the ongoing reforms of the Companies Act (Chapter 23:04). Government’s list of suppliers can be revamped to include beneficial ownership.

The role of the Office of Auditor General (OAG) is without doubt key to strengthening transparency and accountability in the management of mineral resources. Consistently, the OAG has been exposing the rot in the management of Marange diamond resources. Regrettable, the OAG’s reports have not been met with sombre public interest. Unwittingly acknowledging the bad culture of one centre of power and undermining institutions, the public was awakened when the President opined that the state was prejudiced around $13 billion from Marange diamond operations. Given that the Auditor General’s contract has recently been renewed, the public can expect to continue tasting Chiri’s chilli on corrupt practices in the handling of public resources.

Government must be applauded for renewing Chiri’s contract. However, more needs to be done especially ensure that the Auditor General’s recommendations to rectify the misallocation of public resources are complied with in line with Section 309 (3) of the Constitution. Critical, audited financial statements on diamond mining entities in which government had equity in Marange were never made public as they were operating like private companies. Therefore, the alignment of the PFMA with the Constitution as announced in the 2018 national budget statement to expand the institutions to be audited by the OAG must include government controlled entities in line with Section 309 (2) (b).

Since minerals are public assets, the public has interest in how much revenue is generated from the finite resources. Unlike previous budgets statements, it is unfortunate that the 2018 national budget statement missed to the opportunity to clutch mineral revenue transparency best practice like the Extractive Industry Transparency Initiative (EITI).  Apart from mineral royalties, it is difficult to discern mining contribution in other revenue heads like Corporate Income Tax (CIT), Pay as You Earn (PAYE), customs duty and withholding taxes among others. Already, the Zimbabwe Revenue Authority (ZMRA), the country tax administrator is disclosing quarterly and annually revenue performance reports. The revenue performance report shows information per tax or revenue head and they can be twerked to share specifically show mining contribution per revenue head as a quick win. Going forward, it is important to focus on revenue disclosure per mining project. Through Caledonia’s Extractive Sector Transparency Measures Act (ESTMA) report of 2016, data on payments made by Blanket Gold Mine to various government institutions is publicly accessible courtesy on Canadian law on mandatory disclosure by all extractive companies listed at the Toronto Stock Exchange (TSX). Such developments must spur government into action to ensure that Zimbabweans are not starved of information needed to hold government and mining companies to account on management of public resources.

Since the army is responsible for this transitional arrangement through “operation restore legacy”, it is important to draw parallels with “operation hakudzokwe” launched under the guise of restoring order in Marange diamond fields. After the army cracked down artisanal diamond mining in Marange, companies that emerged in Marange like Anjin had a significant footprint of the army in terms of ownership. Similarly, after operations restore order that culminated in Mugabe’s resignation and pruning in government of G40 aligned Ministers, army has moved to occupy key Ministries in Government.

Whilst benefits stemming from the army’s involvement in the exploitation of Marange diamonds are hardly discernible, the army sponsored transitional arrangement anchored on new hope of reforms. To consolidate and sustain the goodwill that was generated from Mugabe’s “resignation”, government must move with speed to implement reforms in the mining sector that lifts mining activities from the veil of secrecy. If government adopts the same approach of Mugabe’s regime which was allergic to mining sector reforms, the ghosts of the missing $15 billion in Marange will not be exorcised. It will leave to haunt the transitional government.

Government must urgently focus its attention on public disclosure of mining contracts, operationalisation of a computerised title management system, beneficial ownership disclosure on mining deals and public procurement contracts, reviewing DTAs to mitigate risk of abuse, disclosure of mining contribution per revenue head, expanding the scope of institutions to be audited by the Auditor General to include government controlled institutions and to ensure that the Auditor General’s recommendations are complied with in line with the Constitution.

 

An Analysis of 2018 national budget statement: a mineral resource governance view point

 

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If you want to know government’s priorities, don’t be swayed by eloquent speeches from politicians, take a close look at the budget. Plans on how government intends to generate, allocate and spend public revenue in a manner that can hurt or protect the poor are revealed publicly. As Zimbabwe is endowed with abundant mineral wealth, a depletable public asset, it is critical to scrutinise the budget to see how government is leveraging mineral assets to promote broad based socio-economic development. After all, the theme for the Annual Pre-Budget Seminar, 08-12 November 2017, held at Elephant Hills, Victoria Falls was “Consolidation of Economic Development and Transformation Through Domestic Resource Mobilisation and Utilisation.”

As a member of the Tax Justice Network Africa, the Zimbabwe Environmental Law Association (ZELA), a lead organisation on mineral resource governance at national and regional level, has strong interest in the 2018 national budget statement, themed “Towards a New Economic Order.” A pregnant theme that induces excitement and apprehension at the same time. Change by nature can result in opportunities for progression or threats for regression.  So, what can we learn about development opportunities or threats from the 2018 national budget statement through a mineral resource governance perspective?

Curbing corruption and rent seeking behaviour in the mining sector

The budget missed the opportunity to embrace mineral revenue transparency best practice like the Extractive Industry Transparency Industry (EITI) to fight corruption and rent seeking behaviour in the mining sector. Mining agreements should be made public, including payments made to various government institutions by mining companies and beneficial owners of mining activities. For a government that prides itself on having strong political will to fight corruption, it is regrettable that an opportunity was squandered to help exorcise the ghost of “missing $15 billion” Marange diamond revenue.

By making public mining agreements, citizens can pressure government and mining companies to sign good deals that avoid skewing mining benefits in favour of corrupt public officials and corporates. Disclosure of various payments made to government institutions gives citizens the power to follow the money to hold to account government institutions on service delivery. As an example, through Caledonia’s Extractive Sector Transparency Measures Act (ESTMA) report, taxes paid to Gwanda Rural District Council (GRDC), Rural Electrification Agency, Ministry of Mines and ZIMRA are publicly disclosed.

 Platinum royalty rate reduced from 10% to 2.5%

The budget stated that Special Mining Lease Agreements (SMLAs) provide for a 2.5% royalty rate for some group of Platinum Group of Metals (PGMs) mining companies. Unfortunately, the budget masked the beneficiary mining companies of this fiscal arrangements which undermines the Public Financial Management Act (PFMA) prescribed PGMs royalty rates-platinum 10%, other precious metals 4%-palladium, rhodium, ruthenium, iridium, and osmium, and 2% for base metals like nickel.

To enhance fair competition amongst platinum miners, the budget slashed platinum royalty rate to 2.5% until August 2019. The budget failed to explain why August 2019. However, from Zimplats’ 2017 integrated report, we can learn that the company’s SMLA expires in August 2019. Thereafter, it can be renewed for two periods of 10 years each. The budget left the public in suspense on what will happen after August 2019.  Is government going to continue with tax incentives for PGMs mining houses or not.

If not managed well, tax incentives can be harmful as noted by the blog- Disputes expose poor mining agreements. In 2015, Zimbabwe Revenue Authority (ZIMRA)’s annual revenue performance report revealed massive cost of the 2.5% royalty rate provided by SMLA to the public purse.

2015 ZIMRA Fiscal hole

By making PGMs houses pay 2.5% royalty rates, it means that government has forgone mineral royalties from the exploitation of PGMs since there is a 2.5% export incentive scheme for mineral export earnings. Zimplats received a $14 million export incentive from 1 July 2016 to 30 June 2017 according to the company’s 2017 integrated report.

It is vital to note that the reduction of platinum royalty rate is the last point in the budget. This raises some eyebrows as to the involvement of the new Minister of Mines and Mining Development, Winston Chitando, formerly Mimosa platinum mine’ executive chairman. Mimosa mine is the only producing platinum mine which was not enjoying the preferential royalty rate since it is not a holder of a SMLA. Notably, it was unfair for Mimosa platinum mine to continue paying a 10% royalty rate whilst other platinum mines were enjoying a 2.5% preferential royalty rate. Government was supposed to renegotiate with PGMs houses with SMLA to comply with the 10% royalty rate prescribed by the PFMA instead of slashing the royalty rates to 2.5%.

Export tax to promote mineral value addition and beneficiation

To optimise benefits from mineral wealth extraction, value addition and beneficiation of mineral is critical. Interestingly the budget gave an example of lithium concentrate with a grading of 5 to 6% lithium oxide through off take agreements for US$600 per tonne. When beneficiated, resultant lithium carbonate is sold at prices ranging from US$15,000 to US$20,000 per tonne. From this example, by exporting raw minerals, the country is forgoing foreign currency earnings, tax revenue, domestic investment finance and jobs.

In 2015 government introduced 15% export on raw platinum export to encourage beneficiation and value addition. The export tax was suspended until December 2017 to allow PGMs players to implement agreed plans with government as detailed below.

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The 15% export incentive scheme failed to reward progressivity in beneficiation and value addition of PGMs. For example, Zimplats which exports platinum matte was treated the same as entities exporting platinum concentrates. By promoting a progressive export tax regime, the 2018 national budget statement made a commendable step. However, the sharp drop of export tax from 15% threshold to 5% may not be warranted.

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Another commendable move is that export tax on raw mineral exports was extended to lithium and black granite with effect from 1 January 2019. The export tax on black granite is progressive as shown below.

Dimensional Stone Uncut Cut only Cut and polished
Export Tax (%) 5 2.5 0

Export tax on gross value of exported lithium was pegged at 5%,

Review of mining fees and charges

Ground rental fee applicable to diamond concessions was reviewed from US$3,000 to $225 per hectare per annum. The review of mining fees and charges was only limited to the diamond sector. Artisanal and small-scale gold miners who demanded the review of fees for several permits required in the mining sector like prospecting license ($200), explosives purchase permit ($500), and explosives storage permit ($500) among others.

It is interesting to note that government has strong interest in vast Marange diamond fields through the Zimbabwe Consolidated Diamond Company (ZCDC). This brings to attention the issue of how government is handling conflicting objectives as a regulator and a player. The review of ground diamond ground rental fees could have been motivated by the desire to give ZCDC a life line.

Artisanal and Small-Scale Gold Output Surpasses Output of Primary Gold Producers

17,163 kilograms of gold were delivered to Fidelity Printers and Refineries (FPR) between January and September 2017. Artisanal and Small-Scale Gold Mining (ASGM) accounted for 51% share of the total gold deliveries in the same period. According the budget, ASGM production was boosted by government interventions like $40 million gold mobilisation fund and efforts to plug revenue leakages through joint compliance monitoring.

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In light of the significant contribution of ASGM to the economy, it is unfortunate that the budget failed to respond to the key asks of many players in the ASGM sector as noted during the public pre-budget consultations held by PPCME in Bubi, Zvishavane and Mutoko districts. ASGM players want government to subsidise the costs of exploration by purchasing drilling rigs; to reduce the costs of multiple permits that criminalises a source of livelihood for 500,000 direct beneficiaries and 3 million indirect beneficiaries of ASGM; and to promote mechanisation of ASGM operations.

Indigenisation now restricted to platinum and diamond sector

The 51/49 indigenisation threshold in the extractive sector is now applicable only to the diamond and platinum sectors. Perhaps this came as an admission that the indigenisation scheme has failed to work seeing that only one company, Caledonia’ Blanket mine is fully compliant with the indigenisation model. To date, only 2 out of 61 community share ownership trust received share certificates.

The analysis of Zimplats’ 2017 integrated report: 11 things CSOs can learn makes an interesting observation concerning what to expect if the company is fully indigenised.

Zimplats indeigenisation analysis

Thin capitalisation redefined

To promote investments considering the prevailing liquidity challenges, the budget redefined thin capitalisation to exclude locally contracted debt in the determination of debt equity ratio (3:1) prescribed by the Income Tax Act. The arm’s length principle applies. Meaning there are safeguards on paper to manage abuse through related party transaction.  Interest accrued on debt element above the debt equity ratio is not an allowable deduction for the purposes of calculating taxable income.

When a company prefers to fund its activities through debt than owners’ equity, it leads to thin capitalisation. If not managed well, thin capitalisation erodes taxable income. Instead of investing owners’ equity to earn dividends, owners can make use related party transactions to fund their operations through debt to earn interest whether the company is profitable or not.

Expanding the scope of institutions to be audited by the Auditor General

The Auditor General’s 2016 report on state owned enterprise highlighted the challenges faced in terms of acquiring audited financial statement for Anjin to verify gross annual diamond sales used to compute depleting fees. By proposing expanding the scope of work of the Auditor General in the PFMA in line with Section 309 (2) (b) of the Constitution, to include government controlled entities like Anjin, there is scope for greater transparency and accountability in the management of mineral revenue. According to the 2012 annual report of the Zimbabwe Mining Development Corporation (ZMDC), the corporation has 10% shareholding in Anjin, while Chinese firm Anhui Foreign Economic Construction Company owns 50% and the remainder is owned by the government. However, it is strongly suspected that Zimbabwe Defense Industries (ZDI) owns the mystery 40% shareholding in Anjin.

Conclusion 

In a nutshell, during the pre-budget consultations, ZELA made its written submission to Parliament, particularly the Portfolio Committee on Mines and Mines and Energy titled 2018 National Budget Expectations: The Quest to Make Mineral Wealth Work for All: African Mining Vision (AMV). Main issues that ZELA raised include; adoption or adaption of the Extractive Industry Transparency Initiative (EITI), resources for the mining computerised title, exploration and mechanisation support for  ASGM amongst others. ASGM players also made their contributions during the budget consultations mainly on exorbitant fees for multiple permits which are criminalising their livelihoods. It is sad that feedback from the budget on outcomes of the public consultations is lacking. Whilst input of large scale investors has a significant footprint in the budget like tax incentives, and the review of the indigenisation policy. FDI is needed to turnaround the economy particularly the capital-intensive mining sector. However, there is need for a policy mix that attracts FDI and mobilising much needed domestic finance for development.

Women’s Voices: Gender Based Violence in ASM Sector

Edited by Nyaradzo Mutonhori and Mukasiri Sibanda

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56 women participating at the one week Artisanal and Small-Scale Gold Mining (ASGM) Academy for Women, have noted with deep concern that Gender Based Violence (GBV) linked with ASGM sector, is a major problem that must be addressed urgently. GBV in the ASM sector deserves special attention. This statement is a summary of profound and compelling cases of GBV linked with ASGM and a call to action to different stakeholders, relevant government institution, corporates, media, development agencies and male counterparts in the ASGM sector.

1.       Overlapping mining claims, double or multiple claim allocation increases women vulnerabilities to violence. The lack of a computerised mining title management system coupled with corrupt practices of Ministry of Mines and Mining Development officials and mainly male investors causes arbitrary displacement of women from gold claims. First In First Assessed principle not respected when it comes to women on claims with proven resources

2.       Corruption by the police officers creates conditions were interpersonal violence frequently occurs in the ASGM sector as the police receive bribes and openly harass rightful women claim owners and their workers to hound them off their operations. This wanton disregard of the right to property (mining claims), is a perverse form of human rights violation against women in this sector.

3.       The long delays in settling claim ownership disputes, which delays are often-times unnecessary, by the Ministry of Mines and the courts are a form of Gender Based Violence as they result in women suffering due to loss of livelihoods for them and their dependents mainly children who need school fees, food and clothing. These institutions of the state are equally actors in perpetrating structural gender based violence against women in the ASGM sector.

4.       Women miners frequently face sexual and physical harassment from the male dominated labour-force who threaten to gang-rape them if they are not paid their expected share of proceeds regardless of gold output and expenses.

5.       Illegal arrests and detention of women in ASGM by mostly male police officers on alleged crimes linked with ASGM make women vulnerable to sextortion. Men often possess financial muscle to bribe their way out of police custody but women in ASGM often do not have similar resources.   The police often charge the women with the crime of Illegal possession of gold and when the women produce their mining licences the police change the charge to failure to produce register yet they do not ask for the registers upon arrest. Unrealistic regulations such as the Gold Trade Act which criminalised gold possession creates an enabling environment for the police to seek bribes and forced sex from women artisanal and small-scale miners. Women hurt the most from compliance risks due to high levels of poverty impeding their ability to acquire costly mining claims.

6.       Violence caused by machete wielding gangs is making ASGM unsafe for women miners. Corrupt police officers are not arresting known gang leaders because of bribes.

7.       During administration of deceased estates, where the estate involves a rich gold claim and where the likely beneficiary is a woman, the probability of them being dispossessed of the claim is very high compared to when it is a male beneficiary. This dispossession is coupled with emotional and physical harassment. The impunity for such violence against women points to structural tolerance and causes aggravation of violence against women facing such situations in ASGM.

Mining is one of the key economic sectors of the country and will be one of the sectors to contribute to the economic recovery of our country. The Constitution and the Broad-Based Women’s Economic Empowerment Framework call for gender equality and equal participation of men and women in key economic sectors. Gender Based Violence in ASGM is a way of excluding women from participating in this key economic sector. The state must stop being an aggressor of violence against women in ASGM by putting in place computerized mining title management and purging the Ministry of Mines and ZRP of corrupt elements. The government must sanitize the operating context for artisanal miners, ridding ASGM of violent machete wielding gangs. WE demand a State that that promotes freedoms and rights for all, intervenes where these freedoms and rights are threatened in key economic sectors like mining, and is structured on diversified forms of participative democracy  by its citizens, men and women alike.

Artisanal & Small Scale Mining Women Academy Off The Blocks

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Participants at the ASGM Academy for Women

To help women to better tap opportunities presented by ever-growing artisanal and small-scale gold mining (ASGM) sector, Zimbabwe Environmental Law Association (ZELA) in partnership with Zimbabwe Miners Federation (ZMF), Women in Mining Association-affiliated with Ministry of Women and Zimbabwe School of Mines are currently hosting a one week ASGM Academy for women. 55 women miners are receiving training in fundamentals of mining at Inyathi Training Centre, Bubi running from 02-08 December 2017.

Participants were pooled from major gold producing rural districts, mainly Bubi, Gwanda, Matopo, Mberengwa and Zvishavane. Preference was given to syndicates, widows and youths. Few sponsors were added to the mix to enable women financiers to understand better the technicalities in the mining sector to sure their investments and to attract more capital.

Themed “Yikho Phela We Invest in Women: The Future of Mining” the academy is jointly supported by the Netherlands Enterprise Agency and Christian Aid Zimbabwe. The Academy is part of the big programme to support formalisation of the ASGM sector through; (i) supporting ASGM association to organise and make their hundred thousand voices count for advocacy; (2) to facilitate multi-stakeholder policy dialogues to responsible, profitable and sustainable growth of ASGM that is an integral part of rural economies; and (3) to enhance linkages between large scale miners and the ASGM.

Prior to the commencement of the school of mining training programme, women met for the first two days to reflect and learn on their practice in the ASGM sector. Main challenges reflected upon include inheritance pitfalls for women miners, physical and sexual harassment by the Zimbabwe Republic Police (ZRP), corruption in the award of mineral rights, limited ownership of mining titles, lack of collateral security to access various loans channelled towards the ASM sector, disruptive role of care giving and the dangers of lack of appropriate workers compensation insurance cover for ASGM sector.

The five-day School of Mines course on fundamental in mining for women covers fundamental of mining geology, introduction to mining law, introduction to mining and mineral processing, basic mine finance and planning, introduction to drilling methods, women in mining, basic safety, health and management, and lastly a practical and educational mine trip will be carried out.

According to Mr Gwaze, School of Mines’ training and operations manager, a tailored made training for women came after realising that women are unique clients. They participate freely and better if they not mixed with males. After the training, women should have gained confidence to successful venture into a male dominated ASGM sector. Further, by employing best practice in mining and mineral processing, women miners can boost their mineral yields.

Find below the women voices on the value proposition of the ASGM for Women;

“I have been mining gold since 2001, but I have never been trained on how I can do proper mining. This course will help me to better manage my gold mine. I look forward at last to enjoy rich picking from gold before I die” 62-year-old Maltilda Masia, a miner in Gwanda.

“we are running women empowerment fund and women development fund, yet our understanding of the ASGM processes was weak.  Now i have appreciation of multiple permits which are legal burden to women miners. Our monitoring and evaluation of ASGM projects we are funding is no longer going to be same, we now have a better understanding of some technical details critical for successful ASGM” Murungi with Ministry of Women Affairs

“As a sponsor, I feel embolden to start and operate my own mine. Further, I will be able to assist the people I am working with on best practice to improve mining and mineral processing methods” Mrs Ncube, a sponsor in Bubi district

“It has helped me in a big way, women have so many things to say and they are so emotional, but time is limited. There are so many issues that need to be addressed by various government institutions involved in ASGM. We are going to engage mainly the Ministry of Mines and the police on issues affecting women” Blessing Hungwe, chairperson of Women in Mining Association formed in partnership with Ministry of Women. She was commenting on the first two days of the Academy which allowed women to share and learn from their diverse experiences.

“This course means a lot to me especially on communication strategies. I now understand the purpose of communication, that is to come up with a message that is easy to understand, easy to remember and a message that steers action from primary targets.  It is also interesting to network with colleagues and to listen to different challenges and best practice among women” Shamiso Hozo, President Women in Rural Mining Zimbabwe.

Follow the twitter hashtag #WomenInASM for updates on the ASM Academy for Women, 02-08 December 2017. Let me conclude by sharing comments I received on twitter and on WhatsApp from colleagues.

Kady ASM

The policy briefs are available here at https://impacttransform.org/en/research/policy-briefs/

“It would be interesting to learn how many women have come in via inheriting claims of their late husbands, and how many are full-on entrepreneurs who have come to small scale mining on their own accord and volition. And is there a difference in terms of their productivity, etc. They would seem to be quite different miners” Professor Richard Saunders

 

 

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