Zimbabwe Mines amendment bill to curb leakages but powers given to President must be struck off

As Parliament gathers public input for the Mines and Minerals Amendment Bill (MMAB), it is vital to sift through the Bill to assess if it primes Zimbabweans for an equitable benefit arrangement.

Generally, public interest in the governance of minerals is compounded by the fact the resources are finite natural public assets. And the extraction of minerals, if not well managed, can leave communities within and surrounding areas worse off.

Mining is synonymous with the destruction of the environment, involuntary displacements, and discretion of cultural sites. Confirming the oxygen supplies to the economy from mining, the Reserve Bank highlighted in its 2023 Monetary Policy Statement that nearly 76 cents per every dollar generated from exports in 2022 was minted from mining.

In total, mineral exports generated US$5.6 billion in 2022, the bulk of which emanated from gold and platinum, 84.08% to be precise. Chrome ore and ferrochrome contributed 4.39%, diamonds 2%, and other minerals 9.53%. Adding the lithium prospects, driven by a flurry of investments, mainly Chinese, mining fingerprints are set to be all over the economy from 2023 onwards.

With this background, this article analyses the mining royalty measures included in the MMAB to contribute to public policy formulation debates and discussions. Mineral royalty issues discussed in this article cover:

• the use of royalty rebates to incentivise local value addition and beneficiation; 
• that royalties must be paid for all minerals recovered from the processing of ores; 
• the fixing of royalty annually in any fiscal year through the Finance Act; 
• powers given to the Zimbabwe Revenue Authority (ZIMRA) to enforce the payment of royalties; and 
• the powers given to the President remission of royalty obligations in full or in part to enhance continuation of a mining operation or enhance export earnings and local beneficiation and value addition.

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