Corruption dents Zimbabwe's mining sector recovery

The mining sector is in turmoil, with bureaucratic red tape and corruption, among other factors, causing loss of business confidence and sparking capital flight, Business Digest has learnt.

Although the government is targeting to build a US $12 billion mining sector by 2023, inconsistency, double standards, double allocations, as well as incompetence caused by a bureaucratic system, could stand in the way if decisive action is not taken.

The mining sector is reeling under the impact of delays in the processing of mining certificates, verification of applications, ground inspection, and delays in the settlement of disputes.

Zimbabwe Prospectors Association (ZPA) president Samson Dzingwe this week said the issuance of mining certificates is taking several years in some mining provinces, with torn and obscure maps causing several mining disputes.

"Blanketing or carpeting of the whole country's mineable areas with speculative EPOs (exclusive prospecting orders) is a thorn in the flesh for small-scale mining and the prospecting business. You will realise that the implication of delays in verifying of applications, ground inspections or verifications and issuance of mining certificates is that prospective miners will now have to spend most of their productive time chasing their applications, thus creating a breeding ground for corruption," Dzingwe said.

He said delays in the issuance of mining certificates breeds illegal miners, reducing the flow of gold through formal channels like Fidelity Printers and Refiners.

"It creates a conducive environment for red tape or corruption, which is an enemy of economic growth. This is the reason why a target of 40 tonnes of gold per year is difficult to achieve," Dzingwe said.

He said the lack of registration certificates causes miners to channel their gold through the black market, which is not good for the growth of the mining industry and the economy.

"Delays close Zimbabwe for business when it is supposed to be open for business, thus chasing away potential investments."Some of the delays are caused by missing or lack of up-to-date data sources, making verification processes difficult.

He said the government needs to look into the closing of prospecting or pegging areas through blanketing or carpeting of speculative EPOs, as it shrinks the small-scale mining business while promoting speculation on vast mineral lands, which militates against productivity.

Dzingwe is frustrated over government's dithering in amending the Mines and Minerals Bill.

"We are also concerned with the silence on the Mines and Minerals Bill, which was rejected and sent back to Parliament by President Mnangagwa in 2018. As a stakeholder, we have not yet been consulted about the bill. We were disheartened to learn that the Bill was discussed by other stakeholders in our absence," Dzingwe said.

"We wrote to Ministry of Mines, Parliamentary Portfolio Committee on Mines and Attorney-General's office, seeking clarity on that issue but up to now we are in the dark on what is happening to that Bill. We even wrote to the Ministry of Mines in connection with this issue, but nothing concrete have been heard from them. Our greatest concern is that we had previously been sidelined, yet we are key stakeholders. By right, we deserve to be consulted before laws that affect our operations are crafted. It is also my belief that laws are crafted for people concerned through exhaustive consultations."

Dzingwe added that miners are worried by government's silence on the Mines and Minerals Bill of 2015, which was earmarked to replace the current Mines and Minerals Act (Chapter 21:05), saying it remains unclear what has been done by the government.

"In other words, it is a total overhaul of the current Act with an addition of computerised or digital Cadastre system and it went through Parliament several times without succeeding. It was thrown back to the Ministry of Mines because of issues to do with transparency and accountability.

"The greatest challenge we had as an association is that the Bill removed us (approved prospectors) from the amendment text without consulting or engaging us as concerned stakeholders That is why we challenged this Bill in 2018. We also wrote to President Mnangagwa after the Bill was passed in Parliament and Senate. We were glad when the President rejected the Bill and sent it back to Parliament. There were promises that when Bill is returned to Parliament, all key stakeholders would be consulted and this has not yet happened," he said.

Dzingwe said there was no need for the ministry to totally overhaul the existing Act just because the government wants to add a computerised or digital Cadastre (mining records) system, but a few amendments in order to accommodate the system. He said the Ministry of Mines should ensure that the verification of applications is done timeously while tattered maps are replaced with clear digital topography maps to ensure the mining sector's recovery.