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Stakes are high as Zim ministers meet mining execs

Harare – Each year in May over the past three years the resort town of Victoria Falls has played host to Zimbabwean mining executives and government officials.

For executives from the mining industry – including high-powered delegations from units of Metallon Corporation, Impala Platinum (Implats), Sibanye Gold and Anglo American Platinum among other mining groups – the stakes were even higher this year as the industry is battling a plethora of operational constraints.

Government representation at the annual conference is getting stronger each year. On Friday, the government delegated Mines Minister Walter Chidhakwa, Finance Minister Patrick Chinamasa and Reserve Bank of Zimbabwe deputy governor Kupukile Mlambo.

The miners’ executives always meet for a closed door session a day before they open up the gathering to other stakeholders, including suppliers and government officials.

“Usually the industry that will be having issues is elected to spearhead their issues and you will note that when it was platinum that was in focus, it was Zimplats and Mimosa whose bosses where presidents of the Chamber of Mines,” said a source.

Batirai Manhando, chief executive officer of Bindura Nickel Corporation, owned by Asa Resources, is the new Chamber of Mines of Zimbabwe president and will be deputised by Ken Mekani, chief executive officer of Metallon Gold, alongside Elizabeth Nerwande from Mimosa – the joint venture owned by Sibanye Gold and Implats.

But while the doors are opened to include discussions with the government, it is usually uncharacteristic of the closed door discussions among the mining executives themselves.

Two years ago, Chidhakwa decreed that miners contribute a levy into a state exploration company. 

The same year, Chinamasa accused the miners of not contributing enough to the fiscus; other government officials have always taken issue on how miners are spending their money, saying most of it is being spent outside the country.

But this year it was different, with Chinamasa saying the mining sector has contributed well to the fiscus, to the extent that he was no longer having sleepless nights. Yet the government is demanding that the miners spend about 75% of their earnings inside the country.

"I want to thank the mining sector for your performance last year. I am happy that results are beginning to show and I can sleep well now," Chinamasa said, amid applause from delegates.

But the applause stopped when a policy document outlined that mining companies must use up all their mineral claims or risk losing them. Zimplats has had to go to court to object to the government taking over nearly 28 000 hectares of land claims.

Such is the see-saw state of affairs of mining in Zimbabwe. As one insider puts it, there is so much mistrust between the government and miners that the mines minister had to apologise for announcing a platinum refinery deal with an Australian company without informing the SA platinum groups in Zimbabwe.

“The deal has been 18 months in the making and when I saw our platinum companies I realised I have been unfair. I should have alerted you in advance,” Chidhakwa told delegates to the conference.

The government has haggled with platinum miners over the past three years as it pushed for the building of refineries inside the country.

But just as with any other annual meeting of miners and government officials, the contentious take away issues from this year’s event encompass power tariffs and a high fiscal regime miners want the government to fix. But these are not new; they have been on the table for the past three years.

“If power tariffs are favourable, people will come and establish smelters and even agriculture will grow. The issue of power is critical to mining and we should seriously look into it,” said Toindepi Muganyi, outgoing president of the Chamber of Mines.

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