7 reasons why it will take long to formalize the small scale sector
Miners are of the belief that, for the economy of Zimbabwe to be restored to yesteryear’s heights, the mining sector have to contribute remarkably. The mining industry is one of the industries that is capable of backing up and financing other sectors that have been struggling to stand. Therefore, there is a need to impulse the formalization of the sector so that it aids other industries.
Rudairo Dickson Mapuranga
Zimbabwe Miners Federation (ZMF) which is a baby of Mines and Mining Development was formed under the new Mines and Mineral act to oversee the formalization of mining in all Zimbabwe’s mining districts. Its mandate is to promote small scale miners so that they transform from being shunned actors into valued and high production mining firms. However, ZMF have a lot to do in order to transform the so called (amakozokoza) illegal small scale miners into formalized small scale mining firms. Experts in the mining industry believe it will take a long time for these illegal miners to choose the formalized way.
The issue EPOs
Reports have it that exclusive prospective orders (EPOs) have taken vast majority of mining land. For example in October 2018 a youth advocate group in Gwanda said that 95% of mining land in Matebelend was under EPOs thereby making it harder for new players to venture into the mining sector formally. Some of these EPOs are given in arid lands where agricultural activities are very few, the majority of people from these areas mainly survive through small scale mining. Thus, the locals under any circumstances would find themselves mining in those lands deemed somebody’s. And also majority of these lands under epos are reported to be idle with no activities taking place, consequently giving chance to illegal miners to find an opportunity of digging.
Mining license fees are out of touch
“It is not usually Zimbabwe’s way to go illegally, in most cases where Zimbabweans are found on the wrong side of the law in their majority, something bigger would have pushed them” said one expert. Thus, generally illegal miners become illegal due to different circumstances forcing them to. Many illegal miners come from a very poor background, thereby making most of them exposed to the pegged mining license fees which are extremely high. With the increase in mining license fees, many small scale miners have resorted to illegal mining because it have proven to be sustaining under these difficult economic times.
Zimbabwe’s unemployment challenges
Lack of employment have proven to be a huge factor in the emergence of illegal gold miners. According to one mining expert, most of the illegal miners are youth who are finding it difficult to live amidst Zimbabwe’s economy deterioration therefore their alternative to live a decent life is through mining. However, most of these youth don’t afford license fees thus they have no capacity to mine in a formalized manner.
FPR pricing
Fidelity Printers and Refiners payment of gold is another reason why illegal small scale miners would opt to be illegal than join the formalized way. FPR pay small scale miners 70% of the total amount in USD and the remaining 30% in Bond note or transfer which is not sustainable at all due to the fact that these miners produce less quantities, the transfer amount is very significant amount lost considering the current market forces in Zimbabwe. Thus, small scale miners would choose to go the illegal mode where they will sale their gold on different alternative markets on which they are assured 100% USD.
The police running a syndicate
The police in Zimbabwe is reported running a syndicate with some illegal miners, allowing the illegal small scale miners to dig for precious metals or stones in return for a share of whatever the miners would have produced. This syndicate is reportedly keeping amakorokaza in the mining business protecting them from the arm of justice. Thus, illegal miners are operating freely under the protection of rogue elements in the police force. Therefore going the legitimate way would be disadvantageous to these protected illegitimate miners since the legal route would provide them with less money than the illegal path where they don’t have the burden of paying tax and licenses.
ZMF is failing to reach out
Some experts reflect that ZMF’s efforts have not been well illuminated to amakorokoza and even to a lot of small scale miners. They believe that there is need for an in-depth education on the importance and benefits of being part of such organizations and the benefits of doing things in a standardized manner. ZMF therefore need to be reachable to all small scale miners and educate them as well as providing them with ideas of improving the sector through different investments.
However, there are miners who believe that ZMF is irrelevant at the moment in as far as the formalization of the sector is concerned. They believe that ZMF will play a crucial role to some extent, but however, their hands are tied up due to the economic and social situations that are prevailing in the country.
“To think organization like ZMF can rid the industry of amakorokoza is wishful thinking, what needs to be addressed is the underlying issues such as poverty that push people into being makorokoza, unless ZMF starts sponsoring these guys to grow their operations, because most of these guys are looking for a few points a day maybe a gram if they are lucky so these organizations don’t really fit into the equation” one miner said.