HomeNewsChamber of mines engages new govt

Chamber of mines engages new govt

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THE Chamber of Mines of Zimbabwe (CMZ) has engaged the incoming government in a fresh bid to push for a slash in mining royalties and ground rental fees.

Report by Victoria Mtomba

In its submission to the Office of the President early this month, CMZ said the new government should adopt the draft mining development policy formulated under the inclusive government to stimulate economic growth.

In May, CMZ engaged miners through consultative meetings aimed at drafting a mining policy expected to consolidate the sector as the country’s mainstay of the economy.

CMZ said the new government should clarify the indigenisation policy to ensure that the country attracts more foreign direct investment.

Zimbabwe’s indigenisation policy compels foreign-owned companies to sell controlling stakes to locals.

Critics say failure by the new government to revise the empowerment regulations could turn away potential foreign direct investors.

Already, major mining companies which include the country’s major platinum miner, Zimplats and Mimosa, have partially complied with the empowerment law.

The miners also urged the government to reduce the royalties and administration costs which government increased last year.

Last year, the government announced an astronomical increase in mining fees and levies which resulted in registration for diamond claims increasing to $5 million from $1 million.

A new ground rental fee of $3 000 per hectare per year was also announced.

Application fees for prospective coal investors increased to $100 000 from $5 000, while those for platinum claims for both ordinary and special prospectors were pegged at $500 000 up from $200.

“Government should replace mining policy fees on exploration as they are more on the administrative nature comparable to other jurisdiction,” CMZ said in its submission.

The mining representative body said labour laws also need to be reviewed so that they would not be a hindrance to business operations.

The capital-intensive sector is currently hamstrung by several constraints which include frequent power outages, high tariffs, weakening commodity prices on the international market, lack of medium to long-term lines of credit for working capital and recapitalisation, obsolete equipment and technology.

The entire mining sector, according to the chamber, requires nearly $5 billion to recapitalise.

The CMZ said despite the growth rate that has been witnessed in the sector, low capacity utilisation has been a major challenge to the mining sector due to shortage of liquidity and low investor confidence in the country.

Faced with such problems, outgoing Finance minister Tendai Biti has cut the projected growth rate for the sector to 5,3% from 17,1%.

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