AMN - Zimbabwe’s mining renaissance continues – comment by Yolanda Torrisi

The mining renaissance looks set to continue in Zimbabwe with parliament passing amendments to the mining bill after removing clauses that required foreign mining companies to list locally. This comes after Mines Minister Winston Chitando a month ago promised to remove the requirements, which he said caused panic among foreign mining firms and were contrary to the government’s push to open Zimbabwe to foreign investors.

Zimbabwe has seen increased interest from foreign investors since the demise of Robert Mugabe in a de facto military coup last November after a 37-year rule.

The new government believes the country's mineral resources have strong potential to drive the country's economy in the future, with lithium, gold and diamonds seen as leading the way. It is encouraging to see the government actively seeking to drive the industry in a positive manner.

Mining accounts for more than half of Zimbabwe’s export earnings but investors had stayed away from the country for many years, partly due to opaque black economic empowerment rules put in place by Mugabe.

It was once one of the most promising economies in Africa but was brought to its knees during a downturn triggered at the start of the new millennium when Mugabe clashed with key western donors over his human rights record and policies such as his controversial land reforms.

Zimbabwe's new leaders have vowed to increase the attractiveness of the country's mineral resources to foreign investors and hope that the new mining bill will help in this regard.

The amendments to the mining bill also allow the mines minister, after consulting with the president, to designate any mineral as strategic if “it would be in the interests of the development of the mining industry”. Designating a mineral as strategic would grant the government greater control over mining of that mineral.

The bill will also for the first time officially recognise small-scale miners, who produce more than 40% of Zimbabwe’s gold output, meaning that their operations will no longer be considered illegal.

The amendment to the local listing requirement came after industry stakeholders and commerce ministers raised concerns that the idea might not be liquid enough to raise capital.

The country is apparently taking steps to clearing all its debt obligations of about US$1.8 billion, with the World Bank, African Development Bank (AfDB) and other financial establishments. Zimbabwe paid back its 15 years of arrears to the International Monetary Fund (IMF) in 2016.

The country also aims to renew its membership of the Commonwealth, which it left in 2003. This is believed to provide a boost Zimbabwe’s ambitious goal to boost trade relations among the member countries, thus accelerating its developmental agenda.

During the Mining Indaba conference in South Africa in February, Chitando said: “We are making amendments to the Mines and Minerals Act and ensuring the ministry itself and its bureaucracy become more efficient to bring more certainty and efficiency.

“We want to ensure mining becomes the engine of growth in our economy. At the moment mining is contributing about 15% to GDP and accounts for over 50% of the country’s export earnings, but we want to significantly improve that.

“We want to improve the ease of doing business in the sector and enhance exploitation of our abundant resources,” he said. “As part of that we have to revive, utilise and expand some of the existing mining assets.” 

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com