First Mining Drc-Zambia March -April 2020 digital edition First Mining Drc-Zambia March - April 2020 digital | Page 20

FEATURE
Mining in Zimbabwe:
time to use it or lose it
B
etween colonial intervention and a
weak regulatory framework, mining
in Zimbabwe has struggled to live
up to its potential. With the government
cracking down on undeveloped licenses,
and aiming to force companies to “use
it or lose it”, we consider the history
of mining in Zimbabwe, and who the
winners and losers of the new policy
could be.
Mining could prove to be big business
in Zimbabwe, with mineral exports
responsible for 60% of the country’s
export earnings as of October 2018, and
the mining sector contributing around
16% of national GDP.
The government has also outlined
ambitious plans to quadruple the
sector’s total value to $12bn by 2023 as
it looks to take advantage of abundant
natural resources such as the country’s
Great Dyke, the second-largest platinum
deposit in the world with around 2.8 billion
tonnes of ore belonging to the platinum
group metals. However, this potential has
been hamstrung by an inefficient sector,
which has failed to meet its 2019 gold
production target of 40 tons, and reached
a value estimated to be around just $3bn.
A key contributing factor is the country’s
lax licensing laws, which permit foreign
“If the Zimbabwean
government implements
the ‘use it or lose it’
principle, it is unlikely
that the small-scale and
artisanal miners would be
able to step in, and take
over those operations,”
said Beech.
18
companies to own 100% of a mine
licence for any commodity, save platinum
and diamonds, in perpetuity.
This has led to several firms holding
cheaply-acquired licences for years,
with no pressure to develop them into
producing mines, cutting into Zimbabwe’s
potential production and depriving smaller
and local companies from the opportunity
to develop projects. In November, mining
minister Winston Chitando announced
that the government will force companies
to develop these assets as part of a ‘use
it or lose it’ policy, its latest attempt to
remove inefficiencies from and stimulate
growth in the mining sector.
The policy builds on similar initiatives
deployed in the gold mining sector, and
is a combination of pro-Zimbabwean
policies implemented in the years
following independence, and pro-
business policies that have underpinned
the country’s economy for a century.
www.fmdrc-Zambia.com