HomeNewsZim seeks control of metal sales

Zim seeks control of metal sales

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ZIMBABWE is considering auctioning mineral deposits, restricting production of commodities deemed strategic and having the State sell the output from all mines, according to a draft policy document obtained by Bloomberg News.

Report by Bloomberg

The proposals are made in a minerals policy prepared by the Ministry of Mines and Minerals, which is yet to be released publicly.

The ministry will start discussing the policy with the mining industry tomorrow, Prince Mupazviriho, permanent secretary for mines, said by phone from the capital, Harare, on May 3, declining to comment on the contents of the draft.

The country needs “an open, transparent and competitive auction procedure for known mineral deposits,” the ministry says in the policy. “The State of Zimbabwe reserves the right to market the people’s mineral assets, but undertakes to recompense the miner at fair and transparent market prices for mineral exports.”

Miners including Impala Platinum Holdings Ltd (IMP), and Rio Tinto Group are currently free to market their own minerals. The policy comes after companies including Impala and Anglo American Platinum Ltd (AMS) agreed to comply with an existing law to cede 51% stakes in their local assets to black Zimbabweans or the government.

Zimbabwe has the world’s second-largest platinum and chrome deposits after South Africa as well as deposits of coal, gold, diamonds and iron ore.

If implemented the marketing policy will be a reversal of an earlier liberalisation of mineral sales, which formerly had been undertaken by the Minerals Marketing Corporation of Zimbabwe and, in the case of gold, a unit of the central bank. Under the proposal gold and platinum group metals will be sold by a dealer authorised by the Ministry of Finance and all other minerals will be sold by the MMCZ.

In addition to the changes to the marketing of minerals the ministry is proposing auctions of deposits as well as imposing new taxes, the policy shows.

A resource rent tax, defined as a tax on profits in excess of an average national return on investment, is proposed to replace the current additional profits tax. An export tax may also be imposed to encourage local processing of minerals, according to the policy.

“The current free mining colonial mineral regime is inappropriate for using national mineral assets to underpin wider development and industrialisation,” the ministry said in the policy.

Mining licenses will be awarded for a maximum of 25 years and minerals including iron ore, coal, copper and limestone may be deemed strategic, meaning that their output can be restricted and their prices of the minerals regulated, the ministry said.

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