The Sunday Mail
Africa Moyo
GOVERNMENT says its policy interventions in 2016 will focus on strategies to enhance beneficiation and value addition of raw commodities – mainly platinum, diamonds and chrome – to realise more revenue from mineral resources.
Value addition and beneficiation, as enshrined in the country’s five-year economic blueprint Zim-Asset, will be broadened next year to cover agriculture and tourism.
In his US$4 billion 2016 National Budget presented last week, Finance and Economic Development Minister Patrick Chinamasa said beneficiation and value addition cushioned against commodity price volatility, and enhanced exports and employment creation.
Minister Chinamasa said value addition initiatives required concerted and consistent local and foreign investment.
“In mining, focus has been gold refining, chrome ore beneficiation, platinum smelting, as well as cutting and polishing of diamonds.
“. . . in the gold sector notable progress is being made following the ban on export of unrefined gold and designation of Fidelity Printers and Refineries as the sole buyer and exporter of gold in December 2013,” he said.
Volatile commodity prices have affected operations of mining houses and with effect from October last year, Government slashed royalty on gold produced by primary and small-scale producers from seven percent to between three and five percent.
Small-scale gold miners were further cushioned after Government reviewed downwards royalty from three percent to one percent in September 2015. This also served to curb leakages.
Deliveries to Fidelity Printers and Refiners from informal, small and large-scale producers hit 13 tonnes as at September 30, 2015.
Minister Chinamasa, however, criticised the contribution of the diamond sector, saying: “The resource has not benefitted the generality of our people, notwithstanding that the diamond industry has potential to uplift our population, especially as we fully exploit the diamonds value chain.”
He said there was greater economic impact from diamonds during times of uncontrolled alluvial panning than what was being realised after introduction of formal diamond mining arrangements.
In Botswana, where about US$3,2 billion worth of diamonds are produced annually, revenues allow every child to access free education up to the age of 13. With regards to beneficiation, Government has licensed 10 diamond cutting and polishing centres.
Aurex, a subsidiary of Botswana’s central bank, has started cutting and polishing diamonds using state-of-the-art machinery from India.
The industry also continues to benefit from VAT exemption on rough diamonds acquired for cutting and polishing, an incentive introduced in January 2014.
Minister Chinamasa said to extract value from the diamond sector, consolidation and plugging leakages through enhanced oversight, transparency and accountability were key.
Government has established and registered the Zimbabwe Diamond Mining Corporation as part of the consolidation framework.
“This will run the affairs of all diamond mines in the country, with the various diamond mining firms acquiring shares in the consolidated mining company in proportion to their net asset value,” said Minister Chinamasa.
The consolidation process is ongoing.
Meanwhile, the Mines and Minerals Development Ministry will work the three concessions belonging to Marange Resources, Kusena and Gye Nyame under the Zimbabwe Diamond Mining Corporation.
Government has sourced equipment to undertake expanded diamond mining activities from Belarus.
The platinum sector has also been accused of dragging its feet as regards to beneficiation.
In 2014, Government introduced a 15 percent tax on exportation of raw platinum to expedite beneficiation.
The tax was lifted this year to align implementation of the tax to the proposed roadmap on beneficiation and value addition.
Platinum producers have now outlined a time-framed roadmap for establishment of domestic refining capacity up to base metal refinery stage by December 31, 2016.
Minister Chinamasa said in sync with the roadmap, Government had directed platinum producers to take concrete steps towards setting up refineries by the end of next year, failure which companies would pay 15 percent tax on raw exports.
In the chrome sector, Minister Chinamasa said Government modified implementation of beneficiation to allow ring-fenced exportation of excess stockpiles.
About 300 000 tonnes of chrome ore were reserved for local value addition.
Chrome ore smelting will ensure the country gets maximum value from ferrochrome and other value-added products.
Exportation of ring-fenced raw chrome ore and fines is being undertaken through a special purpose vehicle Government created to ensure realisation of fair value on exports.
At least 12 chrome smelting companies were allowed to export chrome ore in excess of their smelting capacity.
The SPV will mop-up chrome ore from small-scale miners and explore refining opportunities through tolling arrangements.
