ZIMBABWE’S big mining firms are jittery as a government measure which allows the State to seize unutilised mining claims came into effect on New Year’s Day.
Deputy Editor
While the measure came into effect on January 1 2014, it would become operational after 2017, three years after the mining claims have been deemed idle by the State.
Several mining conglomerates are believed to holding on to large tracts of unutilised mining claims particularly along the 600km Great Dyke and other mineral-rich parts of southern Zimbabwe.
Presenting Zimbabwe’s budget estimate for 2014 last month, Finance minister Patrick Chinamasa said “large areas of prospective ground already occupied continue to be held onto for too long without being exploited, thereby inhibiting growth of the mining sector”.
In order to reinforce the “use it or lose it” principle, Chinamasa proposed that unworked claims be forfeited to the government after a period of three years, adding that the measure would offer new entrants the opportunity to access unutilised claims.
Zimbabwe’s small-scale miners, which accuse big mining houses of holding onto unutilised claims by paying protection fees, have welcomed the new measure.
“There are big mining companies which have been paying protection fees yet there are not working on the claims,” Wellington Takavarasha, president of the Comesa Council for Artisal and Small-Scale Mines said, adding that the new measure’s augured-well for the entry of small-scale miners and the general development of the mining sector in the next three years.
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“This measure is a way of getting more people empowered. All these illegal mining activities along the Great Dyke and gold-rich Matabeleland South are due to hoarding of unutilised claims. We might see a decrease in illegal gold-panning and mining if it is vigorously implemented in the next three years.”
The contribution of the small-scale mining gold producers has been steadily rising in Zimbabwe with an all-time high of 11 tonnes recorded in 2004 compared to other years where the contribution ranged between one, two, three to nine tonnes per annum.
John Chikombero, the chief executive of Zimbabwe Chamber of Mines, said he could not immediately comment.
But analysts fear the measure could have the adverse effect of scaring away investors presently sitting on the fence due to government policy inconsistencies and the controversial empowerment law which demands that foreigners surrender 51% of their shareholding to indigenous Zimbabweans.
Economist John Robertson said the policy was discouraging to the big mines and potential investors in the mining sector.
“It has an implication of stopping exploration work. Why would investors bother exploring for minerals when the government can come and confiscate the claims? But it should be borne in mind that big mining companies base their expenditure on those unutilised claims they acquired.
“For example Zimplats had a plan for mining in Zimbabwe for 50 years. They might not be able to utilise some of their claims in the next three years, but they have invested heavily on machinery. All this is discouraging to miners, mine developers, prospectors. The long and short of it is that it will hold back the rate at which the mining sector will grow.”
The mining sector was initially projected to grow by 17,1% in 2013, but has been revised down wards to 6,5% mainly due to low exploration, lack of capital and weakening commodity prices on the international markets.
