The mining industry in Zimbabwe is hamstrung by lack of exploration
This month amidst reports that Zimbabwe Miners Federation (ZMF) reportedly sent a letter to the Ministry of Mines in order to move a petition that EPOs should be strapped, The Stotle with Rudairo Dickson (RD) met geological mining expert (Kennedy Mtetwa) and discussed on EPOs and certain factors affecting the Mining sector in Zimbabwe.
RD Hello Kennedy, welcome to The Stotle: Inside Mining Zimbabwe can you please share an insight about yourself and your experience mining Geology and how you see the mining industry heading?
KM I am a graduate of the University of Zimbabwe with a BSc Geology Honours degree. I have 28 years working experience in the mineral resources sector mostly in mineral exploration to mines development in Zimbabwe and globally.
RD The mining industry particularly gold mining and chrome mining seem to be on decline, no new deposits are being found that we can brag about, what could be the reasons?
KM Zimbabwe mining industry is hamstrung by lack of exploration which is supposed to lead to new mine developments. So with basically no real exploration in Zimbabwe, means the mining industry is at a standstill at most and in decline at the worst scenario. So yes gold is declining look at the Metallon closure of its gold mines amongst closed Falcon mines. The main reason is the RBZ policy of sole buyer of gold through Fidelity who pay some of the gold funds in RTGS which have a value less than the real USD that gold is sold in internationally.
RD Zimbabwe Miners Federation (ZMF) were complaining that Exploration Prospective Orders (EPOs) should be stripped, is that a good idea and why do you think so?
KM That is an uneducated argument I will call it. It’s people who think mining is about small quartz veins. It’s for people who can’t see themselves looking at the big potential. It’s people who think only big white companies can open big mines. ZMF are free to peg claims right now before EPOs are granted. Why are they not doing so if they know where the new mineral deposits are located? That thinking by ZMF should be dismissed with the contempt it deserves. Zimbabwe requires black entrepreneurs to joint venture with international companies to find new medium to large mineral deposits through exploration in EPOS.
RD you have an experience of visiting others countries having an exposure of why their mining industry are performing very well. Can Zimbabwe adopt one or two methods being used in those countries?
KM Yes I have worked in many countries across the globe for the past 18 years. Plenty things Zimbabwe can copy from exploration and mining heavy weight countries like Canada, Australia, USA, Zambia , DRC. Regards EPOs the Australian system where you can apply for and pay for an EPO online. Australian EPOs require that you shed half the ground you own every so often so that there is continuously new ground for others to apply for new EPOs or small workers to peg claims. That is one thing the Ministry of mines should seriously look at. If implemented then ZMF concerns will be history.
RD Zimbabwe Agenda Sustainable for Socio-economic Transformation (Zimasset) was criticized for scaring away investors, do you think it would have helped in anyway when it comes to mining exploration?
KM Well the 51% local ownership demand is a big draw back. It can only work where the local partner earns the 51% not getting it for free. Look Zimbabweans who have worked and grown in the mining industry some own 100% of their ventures as it is. What scared investors from Zimbabwe is the issue of rule of law and protection of property rights which investors say are not strong enough in Zimbabwe. They cannot risk bringing millions of USD in investments only for some unruly mob to take over their investments. So Zimbabwe must sort out our rule of law deficiencies and our respect of property rights.
RD What do you think apart from EPOs need to be done to improve exploration in Zimbabwe?
KM For gold, Fidelity must pay 100% USD to gold producers. That will attract new investors into the gold mining sector. For diamonds government must open up exploration to whoever is interested and has the funding to explore. For platinum we are seeing no new mines being developed because of the 51% local ownership still being applied to that industry. Government should reduce that requirement to say 35% local ownership.
RD Can we safely say that the Mining industry in Zimbabwe is going to transform the economy of Zimbabwe as experts have been saying?
KM Government must listen to professional bodies for what is required. Lots have written by the Chamber of Mines and the Geological Society of Zimbabwe of what is required to get exploration off the ground again. Yes indeed the mining industry can transform the fortunes of Zimbabwe in a short space of time if the right policies are implemented.
RD Indeed mineral exploration is the key to the growth of the mining sector, what advice can you give to miners when it comes to boosting their output?
KM For miners to boost their output they must get advice from seasoned geologists. The miners must have their properties geologically mapped so that potential new deposits or extensions of existing mineralisation are detected so that they can produce more. Many small scale mines don’t have a geological map at all. They literally mine blindly for lack of a better word. Or they mine visually. Small scale miners should engage the Geological Survey Department for help with mapping their properties. This biggest draw back in Zimbabwe is lack of banks support to small and medium scale mining. They simply don’t give loans to these enterprises. I know that they have tom protect depositor’s funds. Government must through NSSA help fund promising mines and projects. All NSSA does is assist people doing housing developments. NSSA and government forgets that mining earns Zimbabwe forex which is currently in short supply, and requires increasing so that the country has adequate wheat, fuel, medication et cetera that is imported.
This article first appeared in Mining Zimbabwe march 2019 issue