Govt in major empowerment push . . .Small-scale mining to be reserved for locals

Business Reporter

THE Government will ban foreigners from participating in small-scale mining as part of deliberate measures to promote indigenous players, Mines and Mining Development Minister Winston Chitando has said.

Over the years, the Zimbabwe Miners Federation (ZMF), the mother body of small-scale miners, has been lobbying the Government to reserve claims of 50 hectares and below for locals.

Speaking at the recently held Mining, Engineering and Transport (Mine Entra) exhibition in Bulawayo, ZMF president Ms Henrietta Rushwaya reiterated the call for small-scale mining for all claims measuring 50ha and below to be reserved for indigenous Zimbabweans.

It is believed that the scramble for mining title by cash-rich foreigners in the small-scale mining industry had resulted in limited opportunities for locals.

According to Minister Chitando, the Mines and Minerals Amendment Bill would address concerns raised by players in the sector.

“In the amendment of the Mines and Minerals Act, small-scale miners will now be officially recognised, and the sector will be protected and reserved for local miners.

“Currently, there is no legal framework reserving small-scale mining for the local mining sector,” he said.

In February this year, Minister Chitando tabled a revised Mines and Minerals Amendment Bill in the National Assembly after President Mnangagwa declined to sign into law the one passed by Parliament in 2018.

The President expressed reservations over some sections of the Bill, which violated the country’s supreme law.

This included a clause that violates property rights by conferring land rights to the miner ahead of a farmer in circumstances where a mineral would have been found on agricultural land.

Other issues provided for in the previous Mines and Minerals Amendment Bill passed by the Parliament included lack of recognition of artisanal and small-scale miners, the need for mechanisms for the resolution of farmer-miner disputes, limited provisions to address health and safety concerns, as well as transparency in the licensing regime of mining titles.

According to the Zimbabwe Investment and Development Agency (ZIDA), the mining sector is one of the country’s key sectors, as it accounts for 70 percent of foreign direct investment, 80 percent of exports and accounts for 19 percent of Government revenues, 3 percent of direct formal employment and 13,5 percent of national income.

Zimbabwe is endowed with vast mineral deposits that include gold, platinum, diamond, lithium, chrome, coal and semi-precious stones such as amethyst, agate, antimony and amazonite.

Players in the small-scale mining industry are predominantly found in gold, chrome and semi-precious stones along the Great Dyke and elsewhere in the country.

In the gold sub-sector, small-scale miners account for about 60 percent of the yellow metal delivered to Fidelity Gold Refinery (FGR), Zimbabwe’s exclusive buyer.

Gold is the country’s largest single export earner, generating about US$3 billion annually.

The Government plans to produce 35 tonnes this year, up from 30,1 tonnes in 2023.

In the April to June period, total gold output increased to 7,7 tonnes from six tonnes in the corresponding period in 2023.

Meanwhile, the Chamber of Mines of Zimbabwe anticipates that mineral exports will reach US$6 billion next year, up from US$5,5 billion this year.

However, profitability is expected to decline on the back of the anticipated impact of the high cost of production and weak platinum and lithium prices.

In recent years, global metal prices, except gold, have remained subdued, ultimately adversely impacting the production of platinum group metals and lithium across the globe.

For instance, the World Platinum Investment Council has indicated that the platinum market recorded a deficit of 878 000 ounces in 2023.

Total supply fell by 2 percent, while demand spiked by 25 percent year-to-year, but this has failed to lift prices.

In the lithium sector, global prices have plummeted from US$80 000 per tonne in 2022 to under US$20 000 currently, and this has largely been attributed to the glut of lithium on the market and rising interest rates, which have affected demand for electric vehicles.

However, the global demand for gold is on the increase as investors turn to the yellow metal as a safe haven asset to cushion themselves from economic downturns and the effect of geopolitical issues.

Resultantly, the price of gold has increased remarkably from about US$1 900 per ounce in September 2023 to the current price of US$2 500.

Next year, the price of the yellow metal is forecast to reach US$2 900 per ounce.