Mining investors descend on Harare

Potential and existing investors in the capital intensive sector descended on Harare in numbers of unusual dimension, from various parts of the world, to shop for investment opportunities in the country.
Zimbabwe held a highly subscribed mining conference last week, to apprise investors of opportunities available.

The country is endowed with 66 different minerals, including the much-sought after gold, diamonds, platinum and lithium, a mineral that has sent the world into a craze. The estimated gold resource is 13 million ounces, with just over one million tonnes having been mined since 1980.

It is understood that there are 2,8 billion tonnes of platinum underground; chromite (930 million tonnes); coal (26 billion tonnes); nickel (4,5 million tonnes); diamonds (16,5 million tonnes); iron ore (30 billion tonnes) and copper (5,2 million tonnes).

After coming up with arguably the most encouraging investment laws in the world, and repeated guarantees of peace and stability, Zimbabwe has suddenly become a magnet for high value investors, across all sectors of the economy.

This is mainly because the new administration led by President Emmerson Mnangagwa has missed no opportunity to declare that the country is open for business. Again, Government officials who addressed delegates during the conference did not disappoint.

Vice President General Constantino Chiwenga (Rtd), who officially opened the conference, said Zimbabwe’s thrust is to attract “quality investors” to revive the economy.

He said several measures have been put in place to ensure investors are guaranteed security of investment and policy consistency.

Government has amended the Indigenisation and Economic Empowerment Act’s contentious clause which required locals to hold 51 percent shares in all foreign owned businesses.

Now, the law only applies to the diamond and platinum sectors.

VP Chiwenga conceded that the mining sector remains critical to the country’s economic development aspirations.

“The sector continues to be a major foreign currency earner and has the potential to become the pillar of economic growth through value addition and beneficiation,” said VP Chiwenga.

The mining sector is expected to grow by 6,1 percent this year and generate about US$2,6 billion driven by solid performances in the gold and platinum group of metals sectors.

Last year, export receipts clocked US$2,3 billion. Mines and Mining Development Minister Winston Chitando also took advantage of the conference to advertise Zimbabwe’s mineral wealth.

Clearly, investor appetite is there as demonstrated not only by enquiries but also by the turnout for the mining conference.

On their part, investors appreciate the new administration’s commitment to ensure property rights, policy consistency and predictability.

But some expressed concern over the high cost of doing business in Zimbabwe.

Permanent Secretary for Presidential Affairs, Monitoring and Implementation of Government Programmes, Dr Judith Kateera conceded that statutory charges are high in the mining sector.

She said it is important to slash the charges.

“We also need a creation of value for money by lowering the cost of doing business through a review of high taxes, high charges, streamlining duplicated and disproportionately high regulations,” said Dr Kateera.

She explained that the completion of the doing business reforms would also benefit small and medium enterprise miners who are expected to have a big contribution in the sector in the near future.

The initial focus of the ease of doing business reforms was on 10 generic areas targeted by the World Bank when measuring the Doing Business Index of a country.

The generic areas are starting a business, dealing with construction permits, registering property, getting credit, protecting investors, enforcement of contracts, paying taxes, trading across borders, resolving insolvency and getting electricity.

Government decided to focus on nine of the areas, excluding getting electricity, which was felt could be included as part of the energy sector reforms.

Dr Kateera said so far, several milestones have been achieved since the commencement of the reforms in 2015.

In terms of legislative reforms, six Bills have been enacted into law, which are the Banking Act Amendment No. 12/ 2015; the Deeds Registry Amendment Bill; the Judicial Laws Ease of Settling Commercial Disputes Bill; the Movable Property Security Interests Bill, Public Procurement and Disposable of Public Assets Bill.

A number of other legal instruments are being reviewed such as the Insolvency Amendment Bill and the Estates Administrators Amendment Act.

The draft of the Regional Town and Country Planning Bill is being finalised by the Ministry of Local Government, Public Works and National Housing.

In addition to the main pieces of legislation, Government is also reviewing over 22 Statutory Instruments from various ministries, departments and agencies to make them palatable and friendly to investment by removing some of the operational bottlenecks.

Others disapproved of the high number of regulations governing the mining sector.

Indeed, Zimbabwe has 16 different laws that miners have to contend with.

Some of the laws mining houses want harmonised include the Mines and Minerals Act (Chapter 21:05); the Explosives Regulations; Mining (General) Regulations; Mining (Managements and Safety) Regulations; Mining (Health and Sanitation) Regulations; Mines and Minerals (Custom Milling Plants) Regulations; Gold Trade Act; Precious Stones Trade Act; Environmental Management Act; Environmental Regulations; Forestry Act; Water Act; Zimbabwe National Water Authority Act; and Base Minerals Export Control Act.

Other laws, which do not specifically target mining firms but impact on their operations are the Companies, Sales Tax, Exchange Control, Immigration, and Incomes Tax Acts, among others.

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