Small-scale mining – chaos and potential

25 May, 2014 - 00:05 0 Views
Small-scale mining – chaos and potential

The Sunday Mail

Ind4

An informal gold panner makes his way into a mine shaft. — Picture: Percy Musiiwa

Edwin Mwase
Latest economic indicators point to a dynamic shift in Zimbabwe’s economic route as small enterprises are fast becoming the major drivers for prosperity.The country has continually failed to harness the potential inherent gains of this burgeoning sector for economic growth and improvement of the general standard of living for the masses.

Among the plethora of the growing sub-sectors, small-scale mining continues to stand head and shoulders above the rest, awash with vast potential not only for economic growth but overtaking the stagnant formal gold mining sector.

Unfortunately the sector, more commonly referred to as artisanal mining (chikorokoza), continues to be a giant in deep slumber, itching for awakening.

Independent projections say Zimbabwe is rich in gold with production per square kilometre being the highest in the world.

The gold belts are estimated at 6kg/km with total gold reserves pegged at 13 million tonnes.

Artisanal gold mining, which is the primary driver of the mining sub-sector, however, continues to bleed the economy as much of its proceeds are failing to find their way into the formal sector.

Figures show that total gold production in 2013 stood at 14 065 kg, down 4,49 percent from 14 742 kg in 2012.  The revenue for 2013 was pegged at around US$626,11 million. However, analysts argue that these figures could increase if the bulk of the metal realised by the small-scale informal miner and sold via the black market is put into perspective.

Across the country, hundreds of thousands of artisanal gold miners continue to ravage the countryside in search of the yellow metal with very little benefit being realised by the local economy.

Commendably though, the sector has been a consistent conveyor belt of employment for youths in communities running across the great dyke in areas such as Shurugwi, Mashava, Bindura and Chinhoyi, among others.

Despite this seemingly positive development, the tale of lost opportunities continues to plague the industry as previous administrations studiously refuse to recognise the potential inherent within the sector. Since 1999 when the country recorded a gold haul of 27 tonnes of gold, results in successive years have not been very impressive. Local gold production took a plunge during the last decade with a record low being registered in 2008 where a meagre four tonnes was counted.

The figures, many people say, indicate that there is need to regulate and formulate policies that ensure a systematic extraction of the resource.
Yearly output in the last 15 years has been recorded at an average of 20 tonnes.

On the back of existing global prices of the yellow metal, currently pegged at about US$45 per gram, analysts argue the country’s total output can be increased if the small miners are brought aboard into the mix. They argue that Government’s glaring shortcomings in formulating reforms in the sector has led to the current predicament, where small-scale mining is failing to reach its envisaged potential. This is despite the Government setting up US$100 million to capacitate small-scale operations but failing to establish a national joint task force aimed at the formalisation of artisanal miners.

Appearing before the Parliamentary Portfolio Committee on Mines and Energy early this year, Zimbabwe Artisanal and Small Scale Miners’ Council (ZASSMC) board member in charge of legal affairs Mr Paul Mangwana said the Government was neglecting miners, yet at the end of the production cycle it demands to buy the bullion at low prices.

He said private gold buyers from South Africa were offering better premiums than Fidelity Printers and Refiners, a unit of the central bank and sole gold buyer.

South Africans offer up to US$55 per gram as compared to the average US$38 being offered for each gram by Fidelity Printers and Refiners.
Zimbabwe Artisanal and Small Scale Miners’ Council (ZASSMC) president Mr Wellington Takavarasha said the country was losing millions of dollars through several loopholes in the sector.

“There is about 1,5 million unregistered gold panners in the country and they are not forwarding the gold to the relevant authorities.
“These illegal panners should be formalised immediately and the country will rake in billions of dollars annually. If we were to compel these 1,5 million artisanal miners to bring at least five grammes to FPR every month, the country would have many tonnes of gold.” Mr Takavarasha said the country stands to retain billions in revenue if Government formalised the operations of unregistered panners.

As Government continues to dither on the issue, Mines and Minerals Development Minister Walter Chidhakwa said moves to formalise the sector were at an advanced stage. He said his ministry was working on amending the Mines and Minerals Act. “We first need to amend the Mines and Minerals Act which allows for the establishment of title management and secures title deeds by the informal small-scale miners,” he said.

He said the ministry has since forwarded its proposals to the drafting officers in the Prosecutor-General’s Office.

On a positive note, however, Government is said to have already set up a task force which is expected to spearhead reforms in the small-scale mining sector.

The task force will comprise officials from the Ministries of Finance and Economic Development; Mines and Mining Development; and Environment, Water and Climate; the Environmental Management Agency, Zimbabwe Parks and Wildlife Management Authority, Fidelity Printers and Refiners, Minerals Marketing Corporation of Zimbabwe and Zimbabwe Mining Development Corporation. The task force is expected to draft recommendations on how the Government can formalise small-scale illegal miners, provide equipment and put in place mechanisms to curb leakages.

 

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