Zimbabwe: Draft mining bill compels companies to list locally
The firms will also be compelled to do business with local banks in a bid to clamp down on externalisation of funds, which the southern African country blames for crippling cash shortages.
I do not begrudge you making a profit, but I also want my fair share of that profit
The draft legislation, which forms part of the amendments to the Mines and Minerals Act was published last Friday.
“No mining rights or title shall be granted or issued to a public company unless the majority of its shares are listed on a securities exchange in Zimbabwe,” reads part of the bill.
Finance Minister Patrick Chinamasa was quoted by state media on Monday saying, while the government appreciated that companies, including mining houses, were in business to make profits, treasury also expected its fair share from those proceeds.
“I want you to make profit. I do not begrudge you making a profit, but I also want my fair share of that profit and in order for that to happen a fair share to the fiscus, a fair share to you, let the figure be on the table,” he was quoted saying.
Zimbabwe hosts operations of some of the world’s biggest mining corporations such as Implats, Aquarius and Metallon, but none of them are listed locally.
The exchange mining index only has four counters – RioZim, Hwange Colliery, Falgold and Bindura Nickel Corporation – compared to 57 on the industrial index.
Securities and Exchange Commission of Zimbabwe (SECZ) official, Kundai Msemburi recently said they had made proposals to the finance ministry to compel mining houses to list locally.
“In our submissions to government, we are saying let’s shed light on these mining companies and one way of doing that is listing locally because it compels enhanced disclosure, as these companies will comply in terms of corporate governance, community development and all other social responsibilities,” he was quoted saying.
According to the bill, the government will ban export of raw minerals unless with written consent of the mines minister.
Minerals such as gold and silver will only be exported in refined form.
The government hopes the bill will strengthen mineral exploration, as it pushes a “use it or lose it” policy to combat people who hold claims for speculation purposes.
The bill, which has been in the works for nine years, will replace the Mines and Minerals Act (Chapter 21:05) of 1963 if President Mugabe signs it into law.
Delays in coming up with the new legislation have been attributed to endless consultations prior to drafting.
The southern African nation plans to make the law an instrument facilitating growth and investment to a sector that has contributed more than $10 billion to the fiscus in the past five years.
The mining sector is forecast to contribute 25 per cent to GDP and more than 65 per cent of national exports in the next 15 years.
There have been several complaints of people holding on to claims for speculative purposes, thus undermining economic activity in the mining sector.
Mining generates half of Zimbabwe’s export earnings and contributes about 17 per cent of GDP.