The Ministry of Mines and Energy recently held a workshop for Members of Parliament as part of its consultative process towards reforming mining legislation. This comes against the backdrop of a severe slump in mining sector contribution to national income, the controversial government take-over of diamond mining in Marange and the shocking revelations that the country cannot account for a whooping $15 billion in diamond revenue.
The workshop, held in Harare on 14th and 15th March 2016, sought to familiarise lawmakers with three draft pieces of legislation namely; the Mines and Minerals Amendment Bill; Minerals Exploration and Marketing Bill; and Pan-African Mining University of Science and Technology Bill.
The Ministry must be commended for initiating such a consultative process before the Bills are considered by Parliament. It is part of good law making to first of all discuss the policy aspects of legislation with law makers before bringing the actual Bill to Parliament. We hope the consultations will enable law makers to approach mining legislation reform with a view to promote investment into the sector. Any legislation that has the effect of scaring away potential investment is not good law.
The Mines and Minerals Amendment Bill seeks to make the following key changes, among others: introduce mechanisms for the resolution of conflicts between miners and farmers; giving the government the right to declare some minerals strategic; recognise artisanal mining; attend to environmental issues arising from mining; promote mineral beneficiation; create obligations on mining companies to make certain payments to local authorities; and implement the “use it or lose it” principle to mining title.
The Pan-African Mining University of Science and Technology Bill will establish the Pan African Minerals University of Science and Technology (PAMUST), which will have a bias towards mining. It is one of such specialised universities on the continent that have the blessings of the African Union (AU). The institutions are part of the Nelson Mandela Institute of Science Excellence, a legacy project of the AU, meant to bring excellence in science in sub-Saharan Africa. Four universities under this concept were envisioned for the north, south, east and west of Africa. One is in Nigeria, the other one in Tanzania, one in Burkina Faso, while the fourth is slated for Zimbabwe.
PAMUST will be a State-owned university. As such, the Bill is similar to statutes that establish other State universities in Zimbabwe. The objects of the University are as follows: the provision of highly advanced post-graduate courses and research in mineral value addition and beneficiation and related minerals studies; the promotion of technological innovation and knowledge-based development in mineral science; the advancement and transmission of knowledge and intellectual enquiry with a special bias towards the diffusion and extension of mineral science; the advancement of knowledge through teaching, research and learning; and the inculcation of excellence in academic research and community service.
The Minerals Exploration and Marketing Bill will basically reconfigure the current Minerals Marketing Corporation of Zimbabwe and allocate to it additional responsibilities of exploration.
The move by the Ministry to bring legislation to reform the manner in which the mining sector is regulated is long overdue. I particularly like legal provisions that put emphasis on beneficiation/value-addition of our minerals. This is critical if the sector is to contribute more to government revenue and economic growth. The establishment of the Pan African Minerals University of Science and Technology should assist in the promotion of beneficiation.
The reforms must result in legislation that promotes the licensing of more diamond cutting and polishing companies and the promotion of investment in platinum smelting, gold refining and chrome ore beneficiation. The various fees and charges paid by mining companies to organisations such as the Environmental Management Agency (EMA), rural district councils etc must be reduced and rationalised in order to reduce production costs and improve the ease of doing business. The recent decision by government to reduce fees paid to EMA is a move in the right direction.
Members of Parliament and various other stakeholders have been very vocal about the need to decriminalise artisanal mining because of the informal miners or makorokoza’s substantial contribution to output. ZANU PF’s Hon. Dexter Nduna last year moved a motion in Parliament that called upon the Executive to repeal Section 3 of the Gold Trade Act which criminalises possession of gold and also imposes stiff penalties for such possession. He also recommended the repeal of sections 365 to 368 of the Mines and Minerals Act, which criminalises prospecting by artisanal miners. Furthermore, the MP called for the creation of objective, transparent and non-discriminatory regulatory mechanisms which offer artisanal miners easy access to mining titles and legal production channels. These recommendations must be given serious consideration in the current reform of mining legislation.
Generally, the whole exploitation of our mineral resources has been shrouded in secrecy, a development that justifies tougher measures from government in order for the State coffers to receive what is due to them. I however do not think measures such as government taking over the actual mining of the minerals is the solution to lack of transparency and accountability. Government must simply provide the necessary conducive environment for investors to come in and do what they are good at.
The mining policy and legal reforms must be pro-investors. Nationalisation is not the answer. We have numerous examples whereby State-owned have become a burden on the fiscus rather than contributors to revenue inflows.
John Makamure is the Executive Director of the Southern African Parliamentary Support Trust. Feedback: email@example.com