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Enacy Mapakame
Business Reporter
MINING companies will soon be required to pay royalties directly to the proposed Minerals Exploration and Marketing Corporation within 30 days after the sale of minerals once the gazetted Minerals Exploration and Marketing Corporation Bill becomes law.
The MEMC Bill, which was published in a recent Government Gazette, will pave the way for the establishment of the Minerals Exploration and Marketing Corporation (MEMC), whose responsibilities will include collecting mining royalties on behalf of Treasury.
The Minerals and Marketing Corporation of Zimbabwe (MMCZ) Act will be repealed by the proposed law.
According to the MEMC Bill, the corporation shall receive all money paid by buyers in terms of contracts authorised for the export of minerals within a month after the transaction.
The Bill states that mining companies shall pay royalties to the corporation “after deducting any sums to which it is entitled to in terms of section 37 within thirty days of receiving such moneys account for and pay over to sellers concerned any balance of such moneys.”
The proposed law is seen as one of the strategies through which the mining sector can contribute significantly to the economy.
It seeks to entrench accountability and transparency in both Government and mining companies.
In terms of the law, part of the money shall be channelled towards developing the Pan African Minerals University of Science and Technology (PAMUST).
Reads the Bill in part: “The Corporation shall remit 0,5 percent of the gross export sales of base and precious minerals to the Pan African Minerals University of Science and Technology (PAMUST) established in terms of the Pan African Minerals University of Science and Technology Act.”
PAMUST is a Government-led initiative aimed at addressing issues of beneficiation and value addition of Africa’s mineral resources in line with the continent’s mining vision.
The university will offer studies focusing on mining engineering, geology, extractive technology and material science and engineering.
The region fails to realise full potential from its mineral wealth as there is no substantial value addition.
Establishment of the institution is also in sync with the country’s economic blueprint — Zim-Asset — which recognises value addition as an enabler to economic growth.
In mining, value addition focus has been on gold refining, chrome ore beneficiation, platinum smelting, as well as the cutting and polishing of diamonds.
The MEMC is also expected to promote the exploitation of mineral deposits, mineral oils, natural gases and processing products of such operations.
This is in addition to obtaining, analysing and making available information on the country’s mineral properties as well as carrying out research on new or improved processes for prospecting and exploration for minerals.
Mining industry expert Mr Tafadzwa Musarara applauded Government for the move and said it would help curb loopholes in the sector and uphold accountability.
Mr Musarara said lack of exploration has resulted in third world countries failing to establish the quantum of mineral deposits they have.
“The Government is taking a very prudent decision to set up and operationalise a mineral exploration entity that will inform the mineral endowment worth for any concession so that the country can correctly value its mining concessions and earn mining fees that are commensurate and consistent with the mineral to be mined.
“Through exploration, mining companies will be easily held to account for all deposits exploited in respect of tax payments, dividends and other statutory payments,” said Mr Musarara.
Mineral exploration will help the country get more foreign investment into the mining sector, which is expected to rebound by 2.4 percent next year.
The expected growth will be largely driven by strong performance of gold, chrome, coal, nickel, platinum and diamonds albeit the constraints besetting the sector which include depressed international mineral prices, falling demand in export markets, financing, and power shortages.
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