IN the past few years, the Ministry of Mines and Mining Development has revamped mining industry policies to reposition the sector for growth.
But a recent fees hike has triggered disquiet within the small scale mining sector, where operators have complained that this was designed to push them out of business.
In this interview with our business reporter Fidelity Mhlanga (FM), Zimbabwe Prospectors Union president Samson Dzingwe (SD) gives a glimpse of the effects of policy changes, including how ‘blanket’ roll out of exclusive prospecting orders (EPOs) will affect growth and output in Zimbabwe’s key mining industry.
He also shares his view about the creation of a US$12 billion mining sector by 2023.
Here is how the discussion turned out;
FM: Tell us about the architecture of the prospecting industry in Zimbabwe and what role prospectors play in the mining industry
SD: The prospecting industry has been there since time immemorial. As you may know already, mining activities start with prospecting. In the beginning was the prospector, and later on came the miner. This means mineral prospectors produce mines or miners.
The mining industry exists because of prospectors.
FM: Please expand on this. What do you mean?
SD: All big mines in Zimbabwe, you can name them — Zimplats, RioZim, Zimasco, Murowa Diamonds, Freda Rebeca — they are there because there is a prospecting industry backing them.
All professionals work in these mines because a prospector got there before all of them to find a mineral. The prospector does the prospecting and pegs mineralised areas on behalf of their clients. These may be individuals, small scale miners or the big companies. They are consulted by their clients with regards to legal and technical issues about mining acquisitions as they are the only legally registered professionals in the Mines and Minerals Act to help stakeholders in the acquisition of mining rights. All the services that you require as per the Act are only provided by approved prospectors, thus making them pivotal stakeholders in the mining industry.
FM: Tell us, how does this work?
SD: The prospector has vast knowledge of mining law. He or she can use the law in determining whether the area of interest by a prospective miner could be applicable or not. Approved prospectors collect coordinates on the ground and verify with Ministry of Mines and Mining Development master maps and data sources to ascertain whether the required area is open or not for prospecting and pegging. This determination is done both on legal and technical grounds. Approved prospectors are both legal and technical professionals. They stand as the only legal consultants of whatever service required through the Mines and Minerals Act.
They prospect and peg and they do other services like beacon erection, legally represent miners in disputes both at the mining commissioner and at the High Court.
FM: The government recently hiked mining fees. What is your impression of this development as a prospector?
SD: The recently hiked fees are unjustifiable, prohibitive, abortive and retrogressive to the attainability of a US$12 billion mining economy. This will have a negative impact in the operations of the artisanal and small-scale mining sector.
FM: Have you directly engaged government to reduce the mining fees? And if so, what was the government’s response?
SD: Yes, we engaged the Ministry of Mines and Mining Development and they said they will look into the issue.
FM: How will this hike affect the mining and the achievement of targets set by government to be achieved by 2023?
SD: The hike will affect the attainability of a US$12 billion mining economy because it will affect artisanal and small scale miners. As you know, these fees, which have been hikes, are the same fees that are charged for large scale miners (who afford them). Thus (the fees) are pushing small scale miners into extinction. This means stakeholders contributing more like 60% of the gold being sold to Fidelity Printers and Refiners are affected.
This is retrogressive to attainability of the US$12 billion mining economy.
FM: Talk about this target has dominated the mining sector. In your own view is the US$12 billion mining economy attainable. What’s needs to be done to achieve this vision?
SD: Yes, the US$12 billion mining economy is attainable. But what only needs to be done is for the Ministry of Mines to work with all stakeholders through consultation and engagement to avoid retrogressive decisions that thwart the spirit of working towards attaining this target. For instance, the closure of productive mining land and the unjustifiable hiking of mining fees will undermine the spirit of working towards this goal.
To attain the US$12 billion mining economy, speculative exclusive prospecting orders (EPOs) must be removed as they keep our vast mineral lands idle and not productive. The hiked fees need to be reduced to allow the involvement and participation of artisanal small scale miners who are the greatest contributors ahead of large scale miners. We need to grow the artisanal small scale mining sector instead of reducing its capacity.
FM: How much land is under EPOs in Zimbabwe?
SD: About 95% of mineable vast mineral lands in Zimbabwe are under EPOs.
FM: Tell us your view about the way government is granting EPOs. What are the advantages and disadvantages of this strategy?
SD: The Mining Affairs Board (MAB), which deals with the EPOs regime, needs to be efficient and effective. I think EPOs must be issued or granted only for real exploration unlike most of the EPOs we have seen these days blanketing vast mineral lands for speculative purposes.
They are retrogressive to the growth of the mining industry. The abuse of the EPOs regime affects mining industry growth. If EPOs are issued for real exploration purposes, they will help in the growth of the mining industry.
FM: Government is selling Fidelity Printers and Refiners to big mining firms. What is your comment on this move?
SD: If the purpose of selling it will improve service delivery to miners, then it is a welcome development.
FM: Don’t you think that small scale miners were also supposed to get a stake in the company?
SD: Yes, off course. Artisanal and small scale miners were and are still supposed to be part of the 60% to be bought from Fidelity Printers and Refiners. But it seems there was no transparency and involvement of all stakeholders concerned on how the 60% should be partitioned.
FM: Cabinet recently approved a total ban on exports of raw chrome with immediate effect to capacitate domestic smelters. What are your views on this new policy?
SD: This move of banning the exportation of raw chrome is in the right direction in terms of what need to be done or what should have been done though inconsiderate of the impact that it might cause to all small scale chrome miners. The government should have done this (consideration) first before the ban of export of raw chrome.
They should have lured investors in the manufacturing sector, that is the smelting industry first, and then ban the exportation of chrome whilst giving small scale chrome miners a wide option with regards to value addition and beneficiation. It is a good move in long term, although it will affect more families with interest in the chrome business.
I don’t know if there could be a better way to do it with lesser impact on small scale chrome miners’ livelihoods. That would be most welcome. But the ban will affect chrome prices.
FM: Tell us how?
SD: The (local) smelters are going to reduce prices as they are going to face little or competition when purchasing raw chrome from miners.
It is going to be take it or leave it.
Local smelters are traditionally known for offering low prices. The ban will shrink the market of raw chrome locally.