admin Dosman Mangisi
ZIMBABWE needs to hasten legislative reforms that affect mining operations to preserve the viability of the sector and attract increased investment.
The news on global mining giant, Rio Tinto’s official withdrawal from the country has sent shivers through the entire mining industry, which is viewed as the mainstay of the economy.
The fading away of big giants reflects badly on the countryand points to a need for the government especially, to come up with measures of consolidating mining investment.
RioZim was into diamond mining in Murowa Diamonds in Zvishavane and coal mining in Sengwa, Gokwe all in the Midlands province. The company was earmarked to build a $30 billion thermal power station in the southern region of Africa, which was expected to produce up to 2,000 MW.
Feasibility studies for the project were done in 1997 and the project was meant to transform Gokwe into a vibrant town and create up to 10,000 job opportunities.
The project was stalled over concerns around mining legislation and alleged uncertainty surrounding indigenisation and empowerment regulations.
Similar concerns have been raised over the $750 million Essar Africa deal for the revival of ZiscoSteel, now New ZimSteel, which has been in limbo for the past four years.
These developments have cast a dark cloud on economic progress mainly for people in the Midlands, who pin their hopes on these giant projects.
The list includes the now defunct Zimalloys, which is under judiciary management, Zimcast, a cast iron manufacturing concern that was long shut down and Zimasco, which is also on the edge of collapse.
These companies had resounding business activities in the province giving life to downstream firms.
Iron and chrome were giving a meaning to the economy of the country while Sengwa coal, under RioZim, saw a 150km tarred road from Gokwe town being constructed — raising hopes of a vibrant economic activity in the province.
Zvishavane-Ngezi MP, John Holder, a member of the Parliamentary Portfolio Committee of Mines and Energy, says the government is in a quandary over its economic policies.
He said an urgent aligning of policies is critical, particularly regarding mining issues.
“The government needs to urgently align the economic policies in favour of the mining sector considering it’s the sector, which is doing better” said Holder.
“It’s the sector which holds immense opportunities to turn around the economy especially by resuscitating the iron and steel industry. We need to take a look at Zisco Steel, Zimalloys and Zimasco. Just these few and see what was before then. Their impact was felt across the country. If this is not addressed urgently, the mining industry definitely is facing a bleak future.”
Holder highlighted the need to revisit the taxation of mines saying the sector needs incentives as well.
“The mining industry is taxed so much with about 14 different types of taxes. It’s a continuous process of milking the same sector. Some taxes need to be scrapped,” he added without giving the exact tax categories.
The Zimbabwe Investment Authority (ZIA) chairman, Nigel Chanakira, is on record saying policy inconsistency and divergent statements by government departments remain a threat to progress.
“We need policy consistency to remove confusion in the investment market. There’s fear of expropriation of land, where BIPPA was ignored.
“If we do admit our weakness in policy framework and rectify our mistakes, the mining sector holds 70 percent of potential investments into the country,” he said.
Midlands Provincial Affairs Minister, Jason Machaya, has also bemoaned low industrial performance in the province due to closure of iron industries.
He said urgent measures were needed to revive the closed firms and protect the existing ones.
Online Reporter