Political will opening opportunities for investors . . . How to enter the mining sector

Lovemore Chikova

Development Dialogue

Today, we are going to look at investment opportunities in the mining sector and steps that an investor has to take to start operations, as outlined by the Zimbabwe Investment and Development Agency.

Overview

The country is endowed with over 40 minerals including gold, Platinum Group Metals (PGMs), diamonds, coal, gemstones, granite, manganese, chrome, lithium, asbestos, iron ore, copper, nickel, cobalt, limestone, coal-bed methane (CBM) and rare earth minerals.

Growth Strategies

In order to achieve increased and sustained growth in the mining sector, priority will be to improve the ease of doing business in this sector.

This will be realised through finalisation and implementation of mineral specific policy frameworks and a comprehensive review of the Gold Trade Act, Precious Stones Trade Act and amendment of the Mines and Minerals Act.

Further, Zimbabwe has 19 of the world’s rare earth minerals. In order to designate these strategic assets and direct investment into their exploitation, Government, will expedite the formulation of Rare Earth Minerals Policy.

Zimbabwe is under-explored. Government has not been approving Exclusive Prospecting Orders (EPO) despite mineral exploration being vital for mineral resource quantification.

The country has thus lagged behind in terms of new discoveries and large-scale investments.

Government is prioritising approval of Exploration Title and capacitation of Mining Promotion Corporation to undertake targeted exploration.

Further, operationalisation of the automated Mining Cadastre Information Management System will be accelerated to increase efficiency and transparency in mining title management.

Incentives such as “Finders Keep it Principle” will be adopted to encourage exploration. However, a time frame to utilise the findings will be adopted after which the “Use it or Lose Principle”will apply.

Opportunities

Government will target to develop the following mineral value chains:

Gold ore to bullion processing;

Diamond cutting and polishing;

Base metals (nickel, copper, iron, cobalt) recovery from PGMs;

Coal to Coke;

Phosphate to fertiliser; and

Chrome to ferrochrome.

Procedures and criteria for obtaining and maintaining mining claims in Zimbabwe

1. Foreign investors are allowed to own 100 percent shareholding for mining operations in all minerals.
2. Before starting operations, foreign investors are required to register a local company and apply for an investment licence from the Zimbabwe Investment and Development Agency (ZIDA). The newly registered company can then apply for a prospecting license from any Ministry of Mines and Mining Development Offices.
3. Any person who is a permanent resident of Zimbabwe and above the age of 18 may take out a prospecting licence at any Ministry of Mines and Mining Development offices.
4. Each Prospecting Licence is valid for two years.
5. A holder of a prospecting license automatically acquires the rights of prospecting and pegging mining claims anywhere in Zimbabwe.
6. When a prospecting licence holder has identified a mineral deposit that he/she is interested in, he/she appoints an agent or an approved prospector to peg mining claims on his/her behalf.
7. The agent is required to physically peg the area by marking the deposit with a discovery peg. He/She should also post Prospecting, Discovery and Registration Notices on the ground. The notices must be posted in a conspicuous manner to alert other prospectors.
8. Before posting these notices, the agent is required to inform/or seek consent from the landowner of his/her intention to prospect.

NB: Consent is only sought from the landowner if prospecting on a farm less than 100 hectares, otherwise the prospector is only required to inform the farm/landowner in writing either by registered mail or delivery by hand.

9. All areas classified as not open to prospecting and pegging or reserved against prospecting and pegging cannot be pegged, e.g. cultivated lands, dip tanks, dams, etc.
10. Each prospecting licence can peg up to a maximum of 10 hectares for precious minerals and 25ha for base minerals.
11. An application for registration must be submitted to the Ministry of Mines and Mining Development offices. The application must have copies of the following attachments:

(a) Prospecting licence(s).

(b) Prospecting Notice.

(c ) Discovery Notice (Base Minerals).

(d) Notification of intention to prospect to the landowner.

(e) A map in triplicate to the scale of 1:25 000.

12. If the provincial mining director is satisfied that all pegging procedures have been followed, he/she shall issue a certificate of registration upon payment of the gazetted fee.

This allows the holder to start mining operations subject to meeting other obligations like Environmental Impact Assessment (EIA).

13. Within three months from the date of registration, the miner is required to erect permanent beacons on the ground.
14. All precious mineral claims are supposed to be continuously worked on in order to obtain renewal of title. Claims have a 12-month tenure after which they shall expire or be renewed.
15. Gold and other precious metal claims are inspected by production and capital expenditure. Base metal claims can be protected by payment.
16. If a mining claim is transferred or sold, a Certificate of Registration After Transfer shall be issued by the Ministry of Mines and Mining Development.
17. Failure to renew title will result in the forfeiture of a mining claim. Furthermore, loss of title can be through cancellation or abandonment. — https://www.zidainvest.com.