Chamber of Mines recommendations on EPOs

Recently there has been intense discussion on Exclusive Prospecting Orders (EPO). This discussions centre on the importance of EPOs to the development of the mining industry and specifically on whether these instruments require to open space for Zimbabwean players to participate in mining and the search for minerals.

The country went for almost 20 years without an EPO having been granted. During this period those interested in undertaking exploration pegged claims, a development contrary to provisions of the Mines and Minerals Act. Some of the undesired consequences include loss of significant information as the geoscientific reporting system for claims is not the same as for EPOs (being less stringent and biased toward output). This situation also created a backlog as the ground that was subject of EPOs was reserved pending the complete processing of the applications (as required by the law). The decision to suspend the issuance of EPOs created the impasse.

Success cases of the EPOs in Zimbabwe

Work carried out during the tenure of EPOs has over the years been translated into numerous successful mining ventures. Records of these successes are held at the Geological Survey Department. Mines brought into production fall into two categories;

1. Mines from EPOs where mineralization was not known prior to the granting of the order,
2. Mines from EPOs where mineralisation was known to be present, where the EPO enabled the deposit, (and the surrounding country) to be thoroughly prospected and delimited without hindrance by speculators.

The success rate for exploration in Zimbabwe was at 3.9% by 1984 which is quite high by global standards. Success rates for mineral exploration is generally in the order of 0.1%. Attached is the list of some of the successes that resulted from EPOs granted.

The other success is in the generation and archiving of geoscientific information for mining and other land uses. Even when an EPO does not result in the discovery of a mineral deposit, the information generated is useful for the country in knowing the geology of the country. With continued advancement in exploration techniques and knowledge of formation of ore bodies the information can be reinterpreted and additional work conducted in the future may result in new discoveries.

List of Successful EPOs

Legal Provisions on Mineral Prospecting and Exploration

The Mines and Mineral Act under Part IV section 20 provides for Prospecting Licenses. These licenses give rights to search for minerals on the ground open for prospecting and pegging. Anyone above the age of 18 can obtain a prospecting license for prospecting and pegging.

Once one has a Prospecting License, they can request access from landowners and occupiers to conduct prospecting work. On identifying an area of interest the Prospecting license gives the holder right to post a Prospecting Notice. On registration of the prospecting notice with the Ministry of Mines regional office, one has exclusive rights to prospect for 30 days on ground that is 300m radius from the Prospecting notice post.

The Mines and Minerals Act provides for Exclusive Prospecting Reservation (EPO) under Part VI sections 86 to 119. Applications are made to the Secretary of the Mining Affairs Board (MAB). The MBA recommends to the Minister of Mines for the President to Issue the EPO. The President may approve or refuse to issue the order.

The Act also provides for prospecting on ground not open to prospecting and pegging through the Special Grant under Part XIX.

EPO Management and Institutional arrangements

EPOs are designed for capital intensive scientific investigation of ground for purposed of revealing geological deposits. The information so generated benefits the country in land use planning and is important future exploration work. These EPOs (called by different names in different countries) are instruments used the world over to attract huge capital investments into mineral exploration.

Applications for EPOs are approved by the President on the recommendation by the Minister of Mines who is advised by the Mining Affairs Board. The MAB recommends for approval of the work plan for EPOs. The Geological Survey Department is responsible for monitoring all prospecting and exploration activities in the country. Where no work or insufficient work is undertaken, the MAB can recommend the cancellation of the EPO.

The strengthening of the department will ensure that EPOs and Prospecting Licenses that are not adequately worked are recommended for cancellation.

Government is strongly pushing the “Use it or Lose it” principle to be practiced as enshrined in the current Mines and Minerals Act for both exploration and for mining titles to ensure that ground under titles and permits is adequately worked for the country to benefit from the rich natural.

Experiences from other countries

The current provisions of the Mines and Minerals Act are consistent with practices elsewhere in Africa and beyond. The table attached provides information on how other countries are managing mineral prospecting and exploration. While the prospecting and exploration license are given different names in different countries, they have the same basic features.

Given the ever-present competition for land for prospecting and exploration there is for government to create conditions for the coexistence of all size of investors in the mining industry for optimal development of the mining industry.

Land use conflict between small scale miners and large scale miners

The world over there is competition for the ground to explore for and mine minerals. The role of the regulator is to manage the parcelling out of land for mineral exploration for optimal economic outcomes.

The Ministry of Mines, as the prime regulator of the mining industry, is responsible for crafting policies, proposes laws and establishing institutions that best fit the development agenda for the country. Factors that inform decision are political, economic and social.

The world over, there are basic requirements that govern the nature of prospecting titles. The following are some of the requirements:

1. Exclusive rights to search for minerals. This factor is meant to provide order in the management of land under title. One entity at a title is given the rights to explore over a defined area. The government must preside over land carefully in order to ensure sustainable use of land for various socio-economic activities.
2. The land is finite and so are minerals. It is the responsibility of the government to make the best use of land under title.
3. Prospecting and exploration titles are for a short defined period. In most countries, prospecting and exploration titles are issues for periods ranging from 1 year to 9 years. It is expected that once a deposit is identified, the holder will apply for title to mine and the prospecting title is terminated. This is normally a much longer title up to 50 years in some jurisdictions.
4. Holders of prospecting and exploration titles are required to work on approved programmes and are to report their activities and findings to the government.

The Chamber position and recommendations

It is the Chamber of Mines position that both small and large scale operators must be given exclusive rights to explore for minerals. Both classes must be supervised by the Geological Survey Department.  Both must conduct activities based on defined work plan either proposed by the project promoter and approved by the government or designed by the government. The overriding objective is to search for and identify mineral deposit for exploitation. The prospecting and exploration titles must have defined life.

There have been outcries that EPOs take up space and small scale miners have no ground to access for their investments. Proposals to consider include.

• Reducing the size of the initial EPO from the current 65 000Ha to 50 000Ha.
• Provide for an annual reduction in size of EPO.
• Limit the number of EPOs an individual entity may possess at the same time. Some countries use a number (limit the number of EPOs to a maximum of X EPOs) others use area ( limit the total area covered by the EPOs- say not more than 100000 Ha are to be held by one entity at any one time).

These measures will see ground being fired up. The ground relinquished will also have geological reports attached to them based on work that would have been done by the previous holder.

About 60 – 65% of the country has been mapped in detail. This leaves significant ground that requires detailed work for the country to have confidence in the basic geology of the country. Each block that has been mapped in detail has been mapped at a scale of 1:50 000 but maps published at 1:100 000 accompanied by a descriptive text. Attached is a map showing the index of mapping.

The current provision of the Mines and Minerals Act allows for pegging of claims in EPOs for minerals other than those for which the EPO is granted. In practice even for the mineral for which the EPO has been granted, EPO holders have granted the permission to others to peg claims within the EPO area. Section 103 subsection 2 provides that:

‘…..the Minister may, on the recommendation of the Board and with the consent of the concession holder, which consent shall not be unreasonably withheld, authorise within such period as he may specify, any person to peg and register a mining location within the reservation for a mineral other than a mineral for which the concession holder is authorised to prospect.”

(3). No person shall peg and register more than five mining locations under an authority issued in terms of subsection (2).

The coexistence of small and large scale mineral prospectors and exploration entities is, therefore, a matter that is provided for in the Mines and Minerals Act. It is a matter of public record that in the past request to peg in EPOs have been made and allowed to happen. There has been collaboration and co-existence between EPO holders and ASM. EPO holders in most cases accede to these requests. There may be cases where such requests have not been granted because the EPO holder have need for use of the ground being requested. These cases are ordinarily resolved through the ministry structures.

The Chamber of Mines of Zimbabwe is on record to agreeing to co-existence between its members and the ASM sector

Ensuring Participation of Zimbabweans.

In the past, small scale mining was illegal, and the Gold Squad was responsible for arresting our people. The gold squad has been restructured to align it with the government’s thrust of encouraging active participation of Zimbabweans in mining.

Government is encouraging small scale mining and in the recent past, (last 3 years) contribution of small scale mining has increased to be the largest contributor to annual production by class.

Government is encouraging small scale miners to formalise their operation and ensure that they operate within the law. Formalisation of activities allows the government to better regulate the industry for sustainable development. This also means encouraging ASM to take up Exclusive Prospecting Licenses (1 km² in area) as proposed by the Chamber of Mines of Zimbabwe) for purposes of searching for minerals deposits. Effective regulation of the sector will:

• Impact positively on clean water for the nation, mining activities must not pollute river bodies. use of chemicals (cyanide, mercury and others) should be effectively managed;
• Mitigate the impacts of mining on the environment. There must be rehabilitation to save forests to maintain the quality of arable land and grazing land.
• Ensure that agriculture is not affected by unplanned and chaotic activities
• Reduce mineral leakages by allowing minerals produced find their way to national institutions and therefore contribute to economic development

Recommendation and way forward

Based on the Zimbabwe’s past  success stories, and best global practices we recommend that the EPOs be maintained. The current functional legal and institutional framework of the country of properly enforced can promote the critical role of EPOs in the development and growth of the mining industry.

The current system plus the additional provisions on reduced EPO size and relinquishment provisions should adequately deal with access to ground. An instrument used in other countries is escalating fee structures to ensure that significant work is conducted early and no hoarding of ground for speculation purposes is done. This is part of an effective “Use it or Lose it: framework.

We further recommend that the Geological Survey Department be strengthened to better monitor exploration activities. This will ensure that further the quality of the reports are at the highest standard and the country and any future investor can benefit from work of previous investor who worked the same ground.

Index of Mapping of Zimbabwe

List of Successful EPOs