- July 3, 2020
- Posted in NEWS
Major South African investors stand to lose big in Zimbabwe this August when they forfeit unused mining claims through the government’s “use it or lose it” policy.
Because of the country’s lax licensing laws, several mining firms hold cheaply-acquired claims with no pressure to develop them into operational mines.
Mines Minister Winston Chitando told SowetanLIVE’s sister publication TimesLIVE that some firms were holding on to mining claims that could take about 500 years to mine.
As such, parcelling them out to other players would result in increased mining activity – and in turn, stir economic growth. This means the mining sector could increase its export invoices and improve from its 16% contribution to the national GPD.
“Gold, coal and platinum are the particular areas of interest. We will cut concessions in the hands of mining firms and give others who are willing to work as soon as August this year,” he said.
South African and Chinese firms are the biggest investors in Zimbabwe’s mining sector.
While the Chinese are mostly concentrated on coal and diamonds, leading South African firms Sibanye-Stillwater and Impala Platinum own Mimosa Platinum in a 50/50 partnership.
The second-biggest platinum concern, Zimplats, is owned by South Africa’s Impala Platinum. Other numerous South African entities are involved in gold mining, while Metallon Gold, owned by Mzi Khumalo, is winding up operations.
Finance minister Mthuli Ncube told TimesLIVE that while the government would be reducing the size of concessions, it will make the mining sector attractive to more foreign investors. This, he said, had already shown positive signs in the diamond sector.
“We lowered taxable income in the diamond sector and that is set to spread through to all minerals,” he said.
Royalties on diamonds were reduced from 15% to 10% as of January 1 2020.
President Emmerson Mnangagwa set out on an ambitious economic turnaround project to make Zimbabwe a middle-income nation by 2030. However, corruption, policy inconsistency and an unstable political climate stand in his way.