Zimbabwe parliament pushes for royalties review

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THE Zimbabwe parliament is pushing Mines minister Walter Chidhakwa to cut mining royalties amid concerns that the levies are limiting investment in the capital-intensive sector.

By Tarisai Mandizha
Business Reporter

Finance and Economic Planning portfolio committee chairperson David Chapfika said mining is a key sector in the economy. The mining sector has overtaken agriculture which used to be the mainstay of the economy.

Government in 2012 reviewed upwards the mining fees and royalties by over 1 000% resulting in mining companies spending more on fees in a bid to ensure that communities benefit from the finite mineral resources. The Chamber of Mines of Zimbabwe in its 2014 budget submission to Treasury said the review of mining royalties was long overdue.

“The committee urges the Ministry of Mines and Mining Development to review the mining fees and royalties to realistic levels,” Chapfika said.

The increase resulted in registration for diamond claims increasing to $5 million from $1 million and a new ground rental fee of $3 000 per hectare per year.

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.

Chapfika said the country should carry out geological surveys to determine the quantities of the country’s mineral reserves as they are not quantified.
He said the surveys should be treated as a priority and avail adequate funding to the relevant department.

Turning to the proposed use-it-or-lose policy which penalises mining companies for holding on to mining ground for speculative purposes, Chapfika said the move would stimulate mining activity and economic growth.

In 2009, mining overtook agriculture as the key economic driver.

“However, the committee believes that there is need for proper clarity of definition on the same. In some instances, it may not be practical or desirable to have all claims worked on in three years and therefore this policy has to be balanced properly with ground rental fees so as not to discourage proper long-term investments in mining.

“In addition, government should determine a maximum limit of claims an individual person or company should be entitled to,” he said

4 COMMENTS

  1. Chapfika clearly does not get it. Even after his stint as Chair at NIEEB, his ZANU-PF credentials aside, he simply does not get the first principles of the indigenisation and economic empowerment pivot of ZANU-PF’s appeal. Here it is in the vernacular for Mukoma David’s benefit:
    Tine upfumi huri muvhu. Uridzi ndehwedu. Kuita basa rekuchera hakupi mucheri uridzi. Zviri pachena.

    Once David Chapfika gets this, then he will stop seeking to promote Vacheri as the expense of Varidzi. Indeed, he needs to reflect on whose interests he represents in Parliament. It does seem as if his own personal interests (as Mucheri we granite kwa Mtoko) have taken centre stage ahead of the people in the constituency who sent him to Parliament.

    Future amendments to the Constitution must allow constituencies to audit performance of MPs and recall them when, as Chapfika is doing, they get off track. Mukoma “Mucheri” David betrays the constituency interest and is out of tune with the beat of the party whose flag he waves. For now, we ask him to think and speak in the vernacular – as the best tool to getting back on track.

    Inga vakuru vakataura wani, kuti kana mari inoshandiswa mukuchera, ibadza pandima mumunda wangu. Gowo rese nderangu. Ndichapakura ndichiripira dikita reMucheri, asi mhuri yangu ichinanzvira.

    • Uri mboko mfana iwe. dont just take what “vakuru’ said to be gospel. Fungawo. If these fees remain this expensive, then “munda wako uchavata”, just like what is happening in the farms. where there is no cash (investment) there is no income / revenue / reward / harvest

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