Ban all raw mineral exports

Zimbabwe has three platinum mining companies namely Zimplats, Unki and Mimosa. Statistics show that our platinum reserves are the largest in the world, only second to South Africa. From such an enviable world standing, one will expect the country to be copiously benefiting from these abundant mineral reserves.

However, facts on the ground clearly show that the country continues to struggle economically despite being host to such huge platinum reserves. The problem partially lies with the fact that platinum is being exported in its raw form and thus attracting poor prices. Like all minerals, platinum ore requires refining so as to acquire its pure mineral form.
Currently, most of the raw platinum is being exported to South Africa for processing as there are no requisite refinery plants in Zimbabwe. Experts estimate that through this arrangement, Zimbabwe gets only a fifth of its mineral’s value.

In this sense, the country only realises around 20 percent of the value of its platinum exports while the 80 percent is enjoyed by the processing country.
The 20 percent is further shared among the company stakeholders and government hence its resultant insignificant impact on the economy at large and the mine’s surrounding community in particular.
In addition to parcelling out the lion’s share of platinum revenue to processing countries, the country is also concomitantly losing money through the untaxed export of minerals recovered from the processing of platinum. Government does not tax platinum by-products such as gold and vanadium whose value will duly accrue to the platinum processing countries.

More so, government will be simultaneously exporting employment opportunities that are inherently attached to the process of adding value to the platinum ore. Considering the staggering unemployment rate in the country, such a scenario becomes economically insipid. It is not surprising therefore that without the government’s recently launched Community Share Ownership Scheme, the country and mining communities would have nothing to show for their vast reserves of the highly sought after minerals. All these warped mineral logistics and revenue discrepancies could be traced back to colonial times.

It is a colonial legacy shrewdly designed to continuously siphon our raw minerals for the benefit of the resource-starved imperial industries. It started during the slave trade era when our ancestors were captured and forcefully shipped to western destinations where they were used as free labour in plantations.
With industrialisation and the accompanying critical shortage of raw materials, the imperialists spiritedly scrambled and partitioned the mineral-rich Africa.

Their aim was to secure vast reserves of raw materials to feed their insatiable processing industries.
This is how the whole process of establishing mines in Africa without the complementary processing plants begun. It is undeniable that these imperialists were more interested in extracting raw materials than developing the local mining communities.

After extracting the raw minerals using cheap African labour, the colonialists went on to harvest the highest value of the minerals through the refining processes. The question is can we therefore continue to perpetuate a system that conspicuously enrich the imperialist while at the same time disinheriting our people of their God-given natural wealth?
It is vexatious that the same imperial countries that continue to benefit from our minerals are feverishly at the forefront of pushing for economic sanctions that are crippling our economy. In similar fashion, they are also frantically trying to block trade in Marange diamonds because these newly discovered gems are beyond their imperial control and can help bust their ruinous sanctions regime. We should now reclaim control over our mineral resources by ensuring that we extract maximum value from their trade. This can only be achieved through the setting up of value-adding industries that will refine our raw minerals for better prices.

Government should introduce holistic measures that will ensure that all minerals are processed before they are shipped out of the country. Instead of these piecemeal measures where government earlier introduced a ban on raw chrome exports and then later proposed a ban on platinum ore exports, we need a blanket ban on all mineral ore exports in order to encourage miners to establish beneficiation plants.

If the plan is wisely presented to mining firms, there will be no resistance as witnessed in Indonesia where companies are fully supportive of the move to ban raw mineral exports by 2014. The logic behind the support is that value-addition translates to increased revenues for the mining firms as the refined minerals fetch better prices. In this vein, government could introduce accosting incentives like zero taxation on exports of refined minerals while heavily taxing raw mineral exports. Among other incentives, the authorities could also introduce free duty on all equipment earmarked for the establishment of mineral processing plants.

Government could also take a lead role by establishing mineral processing centres through mining regulatory bodies like the Zimbabwe Mining Development Corporation (ZMDC).