The mining sector, a major earner of foreign currency, has been performing below its potential. Its recovery, taking account of the diverse mineral resource base, will be underpinned by various interventions over the coming year.
Raising the capacity in mineral production, continuous exploration as well as beneficiation and value addition of minerals will benefit from joint venture strategic partners who have the necessary technology and foreign currency back-up.
To ensure full exploitation of mineral resources, The Inclusive Government is reviewing the framework for mining rights,
pricing of minerals and surrender requirements. The Mines and Minerals Act will also be amended to facilitate review of surface rentals, discourage hoarding and speculating in Exclusive Prospecting Orders.
There are structural deficiencies in respect of the register of all known minerals in Zimbabwe and their stock thereof. This is largely due to the absence of a clear exploration policy and the related issue of extraction. Quite clearly, there is a legislative deficiency in the above areas, a situation that has created rampant abuse of our scarce resources.
STERP will thus oversee the crafting of an Exploration, Registration and Extraction Mining Policy which will form the basis for a new comprehensive mining sector legislation. Under this overall Mining Policy, there will be separation of exploration from extraction policies and strategies.
Furthermore, The Inclusive Government will explore the establishment of an institution responsible for exploration issues including collecting and building a comprehensive endowment.
Pricing of Minerals
A key component of STERP in reviving the mining sector will be to ensure that international commodity prices are levied and received by mining houses. In short, the pricing gap in respect of which domestic prices lagged behind international prices is a thing of the past.
Consistent with this policy, no more retention on commodity earnings will be made by any authority in Zimbabwe. However, as quid pro quo the Inclusive Government will review upwardly the taxation and royalty structures in line with international standards.
Equally, there will be greater demand made on mining houses on protecting of the environment. Furthermore, while the STERP will be allowing flexibility in marketing of minerals, The Inclusive Government is imposing social development obligations on mining houses.
Marketing of Minerals
To enhance value, the marketing of all minerals other than Gold will be done under the supervision of the Ministry of Mines and Mining Development together with the Minerals Marketing Corporation of Zimbabwe, a Board established through an Act of Parliament.
In the case of Gold, the same will remain a strategic reserve asset, whose licensing and marketing will be in terms of the Gold Trade Act. However international prices will still have to be paid to producers and no amount will be retained by the Reserve Bank.
Similarly, as in the case of other commodities, the Inclusive Government will review upwardly the taxation and royalty levels and structures.
Special attention will also be given to the small to medium gold producers. In this regard, a special facility will be created for the provision of short term finance and assistance.
To the extent that steel is not a mineral but an industrial product, STERP will take measures to ensure that its marketing thereof is done exclusively by the producer and not MMCZ.
In respect of outstanding amounts owed by the Reserve Bank to mining houses, these will be assessed and evaluated to establish authenticity and to ensure that repayments are done by the same within a reasonable time.
Amendment of the Mines & Minerals Act
To ensure full exploitation of minerals resources, The Inclusive Government will expedite the amendment to the Mines and Minerals Act, which is already before Parlaiment. The Act seeks to review the framework for mining rights, with a view of reviewing the mining title system, discourage hoarding of claims which are not being worked, and reforming the Mining Affairs Board.
Minerals Value Addition
The contribution of mining to the revival of the economy is limited by the low level of beneficiation and value addition to our mineral resources.
Initiatives to increase beneficiation and value addition for all major minerals including gold, platinum, nickel, copper, coal, coke, and other various non-ferrous ores and concentrate are being undertaken.
This will include penalties for the exportation of raw minerals where value addition options are readily available.
Presently, virtually all diamonds, emeralds and semi-precious stones are exported in the raw form, whilst a small percentage of gold is manufactured into jewellery.
Concerted efforts will therefore be made to promote beneficiation and value addition programmes in the precious metals sector.
This process will take advantage of the existing local gold refinery and mature jewellery industry, which will make it immediately and commercially feasible to add value to our mineral resources.
Platinum producers will be urged to enter into local tolling arrangements for smelting, converting and base metal refining so that the country fully benefits from its natural resources.
There is also great potential in expanding ferrochrome production in the country.
The Inclusive Government will therefore take advantage of the existing beneficiation facilities to refine all important base metals which include chrome, copper, nickel and iron ore.
The Lomagundi Copper Refinery will also be resuscitatated to ensure maximum beneficiation of locally produced copper which is currently being exported in concentrate form. The Refinery will further be utilised as a toll Refinery for copper concentrates from Zambia, the Democratic Republic of Congo, Namibia and South Africa.
Furthermore, the ban on the exportation of all forms of scrap metal which has encouraged local value addition of base metals will be maintained.
Capacity to benefiaciate industrial minerals currently remains low. This requires more effort to increase beneficiation capacity in the medium to long term.
In the interim, royalty payment levels on all industrial minerals currently being exported in raw form will be increased to encourage exporters to utilise suitable value addition technologies.
Coal presents the greatest potential for value addition in the energy sub-sector.
In this regard, coal mining companies will be instructed to export coke, instead of the traditional coking coal. Punitive measures in the form of increased taxation levels will be imposed for non compliance.
Through availing adequate resources for the use of acquired technologies, the country stands to benefit from increased revenues derived from the by-products of producing coke which include various solvents, tar, and with further processes, petrol and diesel.
The bulk of locally produced coal will be devoted to local thermal electricity power generation with the excess power being exported to the sub-region.
Furthermore, projects to exploit coal bed methane resources will be pursued.
Small Scale Mining Mechanisation
The Programme also provides for mechanisation support for small and medium scale miners with potential to generate substantial mineral exports.
The Scheme will be implemented in conjuction with the Mining Industry Loan Fund to assist miners with loans, access to machinery & equipment and technical services to boost production.
This therefore entails the recapitalisation of the existing Mining Industry Loan Fund.
In this regard, the Ministry of Mines and Mining Development is overseeing the finalisation of the necessary mechanisation strategies with the support of the mining industry.