A proposal by the Zimbabwean government, for the state to control mineral production and prices, has been criticised by the Zimbabwean Chamber of Mines. The industry organisation recently drafted a response in which they reject the proposals. Bloomberg News has recently obtained this draft response.
The proposed mineral policy was first drafted by the Zimbabwe Mines Ministry in March 2013. It seeks to increase state participation in exploration, mining and the selling of metals and minerals.
Zimbabwe has the world’s second-biggest platinum and chrome reserves, while it also has deposits of coal, gold, copper, diamonds and iron-ore.
Zimbabwe’s coal deposits, in particular, cause much interest from foreign investors. Some experts suggest Zimbabwe has the capacity to become the largest independent power producing country in the region outside South Africa. Indeed, the country hopes to begin shipping 15 million tpa of coal to Japan, with talks held with Japanese state run firm, Japan Oil Gas and Metals National Corporation (JOGMEC).
Any policy changes that come into effect would affect mining companies represented by the Chamber of Mines, such as Rio Tinto. These companies are currently free to sell their own minerals.
Alex Mhembere, Chamber of Mines president, told the body’s annual general meeting, “We do not regard our role as opposition to government but partners seeking the same national goal and aspiration.”
The proposed policy would appear to be a reversal of an earlier liberalisation of mineral sales, which formerly had been undertaken by the Minerals Marketing Corp. of Zimbabwe (MMCZ). Under the proposal, minerals, including coal, will be sold by the MMCZ.
“This policy on minerals marketing is premised on the notion that the private sector cannot be trusted,” the Chamber of Mines said.
However, contrary to the Chamber’s fears over a perceived lack of trust, the Zimbabwean government appears to value the opinion of private mining companies. The Mines Ministry is seeking comment from mining companies before taking the proposed policy to parliament to have it passed into law.
The Mining Chamber and other stakeholders will debate the policy on 29 May. Their deliberations could heavily influence the form of a new mining law for the country.
Zimbabwe’s parliament will be dissolved on 29 June, with general elections expected to take place soon after. The new mining proposals are likely become law in the next five-year parliament.
Adapted from several sources by Samuel Dodson
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