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EPOs a case of misplaced concern?

EPOs a case of misplaced concern?

Patrick Takaedza RIOZIM head Geologist

The debate around Exclusive Prospecting Orders (EPOs) has been in public domain for over a year now with many small-scale and artisanal miners determined that EPOs are a malevolence that needs to be dealt with to allow the growth of the mining sector in Zimbabwe thereby helping the country to achieve the projected USD12 billion mining industry by 2023.

Rudairo Dickson Mapuranga

It is however without a doubt that the advantages of these EPOs to the country outweighs its disadvantages which makes them an important element in the growth and development of the mining sector provided these EPOs are carried out in a transparent and scrupulous nature.

What is an EPO?

An EPO is a large area of ground targeting the selected minerals for exploration. The maximum is 65,000 hectares in Zimbabwe and a minimum size is up to the company or individual to choose. In Zimbabwe, EPO’s tenure is 3 years with an option to renew for another 3 years.

EPOs are used by companies as first-pass exploration areas. This means that companies after doing the highly technical exploration studies will eventually drop the EPO ground in 3 years.

How are EPOs issued?

Large scale exploration is carried out under licenses issued by the Head of State and administered by the Mining Affairs Board as per the provisions of Mines and Minerals Act 12:05. Two titles are issued under large scale exploration depending on the mineral to be explored according to the act, which are Special Grant (SG) for energy minerals like Coal Bed Methane, natural gas, oil, and uranium, and EPOs for other minerals, example base metals, gold, diamond.

Why are EPOs issued in Zimbabwe?

Although mineral deposits in Zimbabwe are amongst the best documented in the region in terms of available minerals and area thereof. A search through the available works always forms the first stage in the exploration of any mineral, Baseline geological, geophysical, geochemical, Remote sensing data is necessary at this stage.

It is of paramount importance to note that, over 4000 mineral deposits in Zimbabwe are known from ancient workings and exploration activities in the country were biased towards rediscovering ancient works. The granting of EPOs and SGs is therefore of greater importance in the quantifying of our mineral wealth.

Exploration in Zimbabwe led to the discovery of several major mines some of which are still operating to date these include Zimplats, Murowa Diamonds, Freda Rebecca, Hwange Colliery et cetera.

Zimbabwe has 4 000 recorded gold deposits with nearly all of them located on ancient workings, this is, therefore, is a clear indication that the country remains under-explored to discover deposits away from these ancient workings, issuing of EPOs consequently becomes essential.

History of EPOs in Zimbabwe

The history of exploration dates back to the early 1900s instigating in 1910 concurring with the institution of the Zimbabwe Geological Survey was characterized by distinct phases of prospecting interest. The peak in exploration activities in the country came in the 1960s and early 1970s, especially for base minerals.

Ten years into the country’s independence was characterized by ups and downs in the exploration sphere, however, there was an initial rush for EPOs in 1980-81 chief reason being to reinforce previously suspended exploration activities caused by the war of liberation.

The opening of River Ranch Diamond near Beitbridge encouraged a mounting interest in diamond exploration in the early 1990s, this followed a rush in platinum EPO holders who chose to invest in platinum exploration due to the fall in gold prices in early 1988.

Interest in the exploration of gas was also key interest in the early 1990s with major focus being on Coal Bed Methane, according to the Exploration works that were carried out, a significant CBM resource has been established in Zimbabwe but development to the critical stage of proving the commercial viability of the gas is still lagging behind.

Potential resource areas have been identified but commercial viability of the gas is still to be assessed, the quality of CBM is considered to be good, about 95% methane, 4% Nitrogen, and 1% shared by Ethane, Carbon Dioxide, and Oxygen. CBM resource is estimated at > 20 Trillion Cubic Feet (TCF), Pilot Production wells have been drilled and currently being tested in Lupane.

In the same 1990s, an important event in the history of exploration in Zimbabwe was marked by the coming in of the Canadian International Development Agency (CIDA) who sponsored aeromagnetic data on Zimbabwe.

This attracted several exploration companies to venture into areas that had been previously been ignored, especially the western parts of the country covered by Kalahari sands, this data also prompted diamond exploration.

The discovery of a world-class placer diamond deposit in 2006 points to significant potential in ancient basins on the edges of the craton.

With huge historical data on mineral occurrences and usage of modern exploration techniques, the full potential is still to be realized.

Should EPOs be scrapped?

It has been a case of concern with greater minds in the small scale and artisanal mining industry crushing each other on neck and toe with regards to the position of EPOs, some pushing that the EPOs must be removed while others pushing for a more convenient way of reading through the Act and making sure that the provisions of the act are followed by EPOs holders.

It is therefore of great imperative that miners understand what the Mines and Minerals Act say on EPOs in order for them to get clear clarity and understanding on how to push the agenda on EPOs and SGs in order to address the problems caused by EPOs and SGs.

With all the advantages EPOs have on mining growth and development, it is unwise for anyone to think that EPOs can be scrapped outrightly leaving the country without clear geological data on their mining land.

If granted access to these geological reports miners will run better operations as access to geological will ensure more targeted, efficient mining which will reduce the rampant land degradation, the reduced mining costs will enable miners to have excess capital to reinvest and grow their operations, access to geological will enable miners to attract investors and structure better joint venture partnerships, access to equipment loans, collateral becomes possible as miners can utilise their claim to negotiate better terms thus promoting financial sector inclusion. More indigenous miners can venture into mining as proper information will be readily available to ensure return on investment.

Is Zimbabwe hamstrung by a lack of mining exploration?

All geologists except for a few pushing other agendas which are different and not aligned to future national development but the individual gain would agree to the notion that Zimbabwe is under-explored.

According to figures released by the renowned Consulting Groups in the past, Zimbabwe’s spending on exploration is “the lowest among leading mining countries”. Between 1989 and 2017 Zimbabwe’s share of the global exploration budget fell from 0.2 per cent to literally 0 per cent.

Globally, around 10 per cent of all capital expenditure in mining goes towards exploration, in Zimbabwe, it is near to 0 per cent, the country is not really replacing the minerals that it is mining.

It is clear that Zimbabwe has lagged behind the rest of the world in terms of mining, Zimbabwe used to be one of the largest producers of gold in Africa but currently, it is nearly close to nowhere because no new deposits are being found like in other countries in Africa.

In countries like South Africa, Democratic Republic of Congo and Uganda among others, exploration has been key factor to the growth of the industry in those countries, although Zimbabwe boost of having nearly all minerals found on earth, the way the mining industry is producing send an otherwise message, exploration, therefore, needs to be at the centre stage in the mining industry in Zimbabwe just like in other countries in Africa, factors leading to a limited exploration need to be addressed.

What should be the centre of concern on EPOs?

Samson Dzingwe the president and founder of Zimbabwe Prospectors Association one of the leading people who are pushing against EPOs has said that the fight which small scale and artisanal miners should push is about the way EPOs are blanketed across all mining provinces disadvantaging indigenous small-scale miners who want to help in the national fiscus.

According to Dzingwe, it is of importance for the Ministry to consider other small players who are participating in the industry other than blocking them from mining for quite a long period of time with nothing being done on the ground.

“No one is fighting EPOs, but artisanal small-scale miners and other stakeholders are only against the manner in which these EPOs have been blanketed across all mining provinces in Zimbabwe. It is in the manner they have been carpeted disadvantaging artisanal small-scale miners and other stakeholders thus a thorn in the flesh. The Ministry of Mines should have considered other small players’ great participation in the mining industry other than blocking, stilling, aborting or making them extinct with time. We need coexistence of both large- and small-scale miners and preclusion of certain areas throughout all mining provinces for free participation of artisanal small-scale miners and other stakeholders to prospect and peg with no restrictions from the blanketed or carpeted EPOs”

“Certain portions throughout all mining provinces with EPOs must be precluded or EPOs reservations to allow artisanal small-scale miners and other stakeholders free participation in the mineral wealth of their own country as sons and daughters of this wonderful country,” said Dzingwe.

Mr Patrick Takaedza the Group Chief Geologist for RioZim which is currently the largest diversified mining company and gold producer said “One thing that the small scale miners have overlooked is the fact that EPOs are not there to explore for gold only. Literally all big mines have been discovered through exploration in EPOs, including ZimPlats itself”.

“Exploration is very expensive and risky business which the small scale miners have no capacity to undertake. The big companies who have that capacity will not invest in 10ha size claims for the simple fact that such a small area will never hold significant resource to recoup investment or produce for a couple of years” he continued

“Recent thrust in exploration is to find deposits that are subsurface without any surface expression which the small scale miner has no capacity to find”.

“Exploration diamond drilling costs approximately US$100 per m. So EPOs focus on long term sustainability of the mining industry while small scale miners are just focused on near-surface, less than 100m reefs which sooner or later will get depleted and exhausted”

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“Production will need to be replaced by deeper reefs or much lower grade deposits and neither of these are attractive to the small scale. Artisanals will never sustain the mining industry because of these two simple facts. They cant mine deep and they cant mine lower grades’ He ended.

Speaking at a Miners Meeting held in Norton in October this year, the Zimbabwe Miners Federation (ZMF) Vice President said that miners are misdirecting their energy and fighting against the very thing that could uplift them and the nation. The Mine and Minerals act has many sections that protect the miner and safeguard their rights regarding mining claims under EPO’s these rights if enforced coupled with “lose it or use it” which is under review by the Ministry will make way for a better mining sector and impact small scale operations positively.

The course of concern for miners on EPOs should, therefore, be an active role in making sure that the provisions offered in the Mines and Minerals act are followed and carried out for the benefit of every stakeholder in the mining sector. In actuality, miners are supposed to ensure that the act is followed and adhered to by the Government and EPO holders, to protect their rights and ensure they gain from the presence of EPOs in their areas.

What needs to be done?

Small scale and artisanal miners should desist from a culture where they prefer lamenting about EPOs like what has been happening for the past years with no progress certainly coming from their lamentations.

It is therefore vital for miners to rather map a way forward by engaging government on the following three points:

1) Approving and disapproving EPOs

It is important for miners to know that they have the power to approve or disapprove EPOs if the EPOs have not been signed. Miners, therefore, have the right to lobby for disapproval or approval, when approved miners are also able to push for them to be granted access to the receded land along with geological data yearly, this release of land and follow up by all miners across the mining provinces will, therefore, curb corruption.

2) Permission and retainment

The other parts of the act that allow miners access through permission and retainment of their claims should be enforced as per the act this will curb corruption through miners no longer being overridden or disregarded when in possession of land rights, in order to oppose and make proper submissions referencing the act.

3) Use it or lose it

Miners must lobby to ensure that the use it or lose be enforced as this guarantees the release of land tied up for years under the guise of EPO’s or ownership, the need for the activity will push owners to release land leading to miners accessing more land.

It is a known fact that Zimbabwe is seeking to resuscitate the economy through mining, therefore, there must be proper functional processes that allow and cater for small, medium and large-scale miners, the bigger picture is to quantify minerals and the quantifying of these minerals must be done within the confines of the law.

It is of paramount importance to note that all exploration projects must be monitored by all stakeholders and representatives to curb speculation and declaration of false or distortion of exploration data.

Conclusion

As renowned geologist Kennedy Mtetwa would sum it up, it is extremely important for the country to grant EPOs and these EPOs actually can take a long time because world-class mines don’t get discovered in 3 years. It took many years of exploration to have the development of mines like Unki, Mimosa, and Zimplats.

Mtetwa also said that, by Zimbabwe stopping EPOs, it would push us behind by 10 years in getting new deposits from new EPOs. On global statistics, only 10 percent of EPOs will return viable projects in 10 years. The banning of EPOs will come back to haunt the country in terms of serious mining.

When an EPO is granted, EPO holders allow miners to peg in areas they don’t have interest in after first pass exploration.

It is also extremely important for the government to monitor the activities of EPOs to avoid a situation where there would keep mining land for speculative purposes other than exploring. EPOs holders must make public their findings quarterly to increase transparency.

It is also important to note that, it would be foolish for the government of Zimbabwe to open the whole mining area for small scale mining prospection before exploration, if EPOs were not granted for the Zimplats, Karo, Arcadia lithium project, etc, the whole area would be under small scale gold miners as we speak, other minerals would be put to waste.


This article first appeared in the December 2019 issue of the Mining Zimbabwe Magazine

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