ABOUT 50% of mining industry investors thrown off balance by government’s threats to repossess idle concessions have stampeded back to their assets, unsettled by the drastic action, the Zimbabwe Independent heard this week.
Threats to repossess idle assets gained traction last year, when government revealed thousands of concessions were not being developed to full-scale operations.
At the end of 2022, Mines and Mining Development Deputy Minister Polite Kambamura said one such miner was holding massive gold concessions without developing them. Authorities say the bulk of idle concessions were being held for speculative purposes.
In an exclusive interview with the Independent this week, Mines Minister Winston Chitando disclosed his tough stance had unsettled targeted investors, with half of those approached returning back to start developing their mines.
Chatando, who returned to the Ministry of Mines about two months ago after a brief reassignment to the Local Government Ministry in a cabinet reshuffle late last year, maintained Zimbabwe was determined to take back the assets and parcel them out to serious investors.
"Well, I cannot give you a number offhand, but what is important is this (the repossession threat) resulted on those players whom we have met (returning).We do it according to the law where we give people a certain time frame that you are not utilising your resource,” Chitando told the Independent.
“If you don't come up with a programme you are going to lose a concession. You find that well over 50% of people we contact immediately put their eggs together to make sure that they get into production, which is what the government wants to see,” Chitando added.
“So yes, we did the first major phase of that, which was done. Now, we are going to the second phase, where we will be targeting a lot of concessions which are not being utilised," he added.
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Government in 2021 took back over 80 mining concessions under its “use-it or lose-it” policy, which at one time was used to deal with swathes of derelict farmlands taken over in violent land invasions from 2000.
“The use it or lose it policy has been implemented. We will have formal announcements in due course. But we have repossessed over 80 assets and we will be making a formal update on this and we will continue to do so (redemption),” Chitando told State media back in 2021.
However, government has, in the past, announced that it was also looking forward to re-sizing some of the concessions with a huge resource base and inordinate life spans and allocating them to other potential investors.
Zimbabwe’s Mines and Minerals Act empowers government to repossess idle concessions to prevent speculative holding of valuable assets.
The regulation seeks to promote investment, job creation and ensure broader access to mining assets by allowing those ready to mine to file claims and obtain concessions.
Chitando spoke as report said two weeks ago the platinum assets of a Nigerian billionaire who had promised to invest up to US$1 billion in Zimbabwe could be taken back after delays in kicking off operations angered authorities.
But the billionaire’s aides assured Zimbabwe’s media during a tour of his mechanised mining equipment and lithium processing plant in South Africa, that thorough preparations were underway before project implementation.
Commenting on Zimbabwe’s mining taxes and royalties, which have often been blamed for discouraging investors, Chitando argued that developments in several subsectors including gold, were demonstrating that investor appetite on the country remained robust.
He said his office was open for discussions with investors on taxes and fees affecting the industry.
“Well, I am not sure what the observers would have seen in terms of the calculations,” Chitando told the Independent.
“I think they should come with the numbers and demonstrate the numbers and indicate how it (the tax) is making it unprofitable. We do have a very good fiscal set up which is conducive for most projects. I mean, you look at the establishment of the steel sector. You look at what is happening in the gold sector, what is happening in the platinum sector, what is happening in the coal sector, surely those things would not have been happening… But I think where people have specific proposals they want to engage, the government is ready to engage. But we do have a fair and equitable fiscal setup,” Chitando added.
Mining is one of Zimbabwe’s key sectors.
