Zim poised for gold boom

12 Jul, 2019 - 00:07 0 Views
Zim poised for gold boom Mines and Mining Development Minister, Winston Chitando

eBusiness Weekly

Ishemunyoro Chingwere
Zimbabwe is poised for a boom in gold production after Government announced that it will henceforth enforce a clause of the Mines and Minerals Act that gives the state the powers to forfeit mining titles being held for speculative purposes.

There is a general belief that a number of claim holders without capacity to mobilise personal capital are likely to hasten to look for investors, while those with financial muscle will just start exploiting the resources. The move was announced by Mines and Mining Development Minister Winston Chitando in an interview with Star FM Radio on the station’s programme, Minister’s Desk on Monday evening.

Zimbabwe is this year targeting 40 tonnes of gold deliveries to state gold buying entity, Fidelity Printers and Refineries (FPR) on the back of a record 33,2 tonnes delivered last year.

This year’s target is, however, part of a larger scheme to grow deliveries to 100 tonnes per year by 2023 as Government seeks to grow earnings from mineral exports to US$12 billion per year.

Minister Chitando said the Mines and Minerals Act had provisions where all holders of precious mining assets, gold and platinum, are expected to attach their production statistics whenever they pay for their mining titles annually.

However, Government has not been enforcing the clause on production hence titles holders clinging on to the assets but keeping them dormant.

“Basically, the use it or lose it principle is premised on a number of clauses in the Mines and Minerals Act, but two of those clauses Act are firstly: where you have precious mineral assets, which is gold and platinum, when you renew the mining title . . . over and above paying a fee, you are supposed to be undertaking development or you should be in production,” said Minister Chitando.

“What has been happening is while that provision has always been there in the Act, it has never been enforced.

“So you find that a number of old gold workings, which have been dormant for a number of years . . . because the owners of those mining titles, they just come in every year to pay a fee and they don’t do any work on them.

“So by enforcing this principle, it means that each and every old working, each and every gold asset even if it is a green field asset, you can only renew it every year if you have a programme to undertake development or if it is in production,” he said.

The move is likely to have a major impact particularly on medium to large scale gold assets as these are the ones that are generally being held for speculative reasons or are lying idle.

This has resulted in primary gold producers falling behind secondary producers or small scale miners who are now accounting for the largest chunk of deliveries to FPR despite most of them relying on rudimentary mining tools and or less efficient technologies.

Zimbabwe joins many other countries with rich mineral deposits in enforcing the “use it or lose it principle as a measure to fend off speculative holding of mining titles.

South Africa, one of the major global mineral producers, has put mineral titles holders in the country on high alert after announcing that it will now come down heavily on mining speculators.

This came after Zimbabwe’s southern neighbour had seen a rise in mining assets being placed under care and maintenance which Government felt was speculative.

“The high number of mines and shafts under care and maintenance contribute heavily to the massive decline in both production and employment.

“In this regard we will meet companies that are culprits of these practices,” South African Mines Minister Gwede Mantashe told the media in May last year.

“We intend to discuss honestly and robustly on the use it or lose it principle, found in our law. Our mineral wealth must be exploited, not left unused, if we are to generate economic growth and impact on the development of society.

“It is in this context that we wish to invite mining companies that are involved in this practice to come and make presentations to the mineral resources department on why this situation pertains,” said Mantashe.

Share This:

Sponsored Links