SONA: Do I Smell A Breath of Fresh Air on Mineral Resource Governance Reforms?
A country that is endowed with diverse and significant mineral wealth is crippled socio-economically. Cholera outbreak – a mediaeval disease, severe foreign currency shortages, inferior tax revenue inflows and high levels of corruption are all signs that mineral benefits are not shared with citizens. Several mining mega deals were sealed this year, yet the public is not aware whether the deals are good or bad for sustainable development. Hence the deep urge to scan the State of the Nation Address (SONA), for nuggets, if any, on mineral resource governance reforms which are critical to the reversal this curse. The SONA was delivered by the President on Tuesday, 18 September 2018, during the first session of the 9th Parliament of Zimbabwe.
Re-tabling of the Mines and Minerals Amendment Bill
For every long time, much needed reforms to the Mines and Mineral Act have proved to be elusive, even though the country’s socio-economic prospects are hinged on mining. This time around, the President signature was the missing link to give life to the Mines and Minerals Amendment Bill passed towards the end of the 8th Parliament. Seeing the inadequacy of the Mines and Mineral Amendment Bill, among other gaps, online registration of mining rights and titles, the Bill was referred to Parliament by the President. A massive opportunity for Government to comprehensively align the bill with Africa Mining Vision (AMV) and the Constitution, to harness mining for broad based socio-economic development.
One major issue which requires priority is the alignment of the Bill with Section 315 (2) (c) of the Constitution which requires Parliament oversight during negotiation and performance monitoring of mining contracts. Such a development will mitigate the risk of signing bad deals which do not yield a greater development dividend from mining – schools, hospitals, roads and industries. If government is serious about fighting corruption and to mobilise resources to deliver quality health and education services, a strong dosage of contract transparency is a necessity. All mega deals that were signed this year should be made public and Parliament oversight role should not be undermined.
Focus on small scale mining
It is noteworthy that the President highlighted that government will continue to support mechanisation of the small-scale mining sector to improve productivity. Government must go beyond mechanisation to support exploration which is the life blood of any mining activity. Ease of doing business reforms are necessary to ensure that small scale mining is not criminalised through huge compliance costs. For instance, $1,000 is required to get permits to purchase and store explosives. Attention should also be paid to artisanal miners to ensure a conducive policy and legal environment that recognise this important source of livelihood for many Zimbabweans. Over 500,000 are directly involved in artisanal mining. There is urgent need to curb wanton violence that seems to be the order of the day in artisanal and small scale gold mining.
Artisanal and small-scale miners are indispensable players in that they exploit resources that are not economically viable for large scale mining. Further, small scale mining offers opportunities for job creation, income generation and community enterprise development.
Curbing leakages of precious minerals
To curb the leakage of precious minerals, the Gold Trade Bill and the Precious Stones Trade Bill will be tabled before Parliament. Currently, the Minerals and Border Control Unit (MBCU) laments the fact that most smugglers of precious minerals are acquitted by the courts. This anomaly must be addressed by making the laws water tight. It is also crucial to align the Gold Trade Act with the Reserve Bank of Zimbabwe’s policy on buying gold on no questioned asked basis. Government, therefore, must work on a special permit for artisanal mining to ensure that artisanal mining is not criminalised. Another issue which deserves attention is the provision of incentives to whistle-blowers who provides credible information critical to stop the smuggling of precious minerals.
Broadening the range of minerals exploited
Boasting of over 40 known minerals that can be exploited economically, the drawback is that the country’s mineral performance is concentrated in a few minerals. Gold, platinum, chrome, diamonds and nickel account for 90% of the country’s export earnings. It is remarkable to note that the President acknowledged the importance of broadening the basket of minerals being exploited. A move fundamental to unleash mining potential to propel broad based socio-economic development. Naturally, high valued mineral easily grab the attention of policy makers because they rake in more export earnings and tax revenue. Yet, the so-called development minerals, which are low valued but with greater economic linkages are easily neglected. Development minerals are used in agriculture and construction sectors, phosphorous, limestone and iron among others.
Institute for Research, Innovation and Development
The Africa Mining Vision prioritises research, innovation and development to spur mining sector development. One of the main areas for research and innovation which deserves priority is clean technologies that efficiently substitute the use of mercury to recover gold. Ministry of Mines has projected that 100 tonnes of gold will be produced annually by 2023. This points to an impending disaster if government does not drive development of gold recovery solutions which eliminates mercury use. Mercury is dangerous to health and environment.
It is certainly encouraging that the President promised several reforms which have strong implications on mineral resource governance, a sweet smell. Hopefully, Parliament will move with speed, consult publicly with stakeholders and come up with resource governance laws that domesticate the aspirations of the Africa Mining Vision. Parliament oversight on negotiation of mining contracts as well as performance monitoring of mining contracts is a deal breaker. If this is not urgently done, fragile public trust in the new government will shatter.