USD 12 Billion Mining Economy by 2023: What are the Key Enablers?

Introduction

The Government of Zimbabwe recognises the potential of the mining sector to transform the economy, hence, on the 23rd of October 2019, it unveiled a policy document outlining how the country plans on turning the mining sector into a USD12 billion industry by 2023. In launching the initiative, the President of Zimbabwe, His Excellence Emmerson Mnangagwa envisaged that investments and benefits accruing from a thriving mining sector will be critical building blocks for a prosperous Zimbabwe. Under this policy document, priority is given to investments in exploration, opening of new mines, beneficiation, and value addition of minerals as well as expansion of projects subject to various commercial and economic models. It is against this background that this week’s Weekend Digest is exploring the key enablers of the envisaged US$12 billion economy.

Unpacking the US$12 billion economy in brief

The government of Zimbabwe launched the USD12 Billion Economy by 2023 in October 2019 as part of the broader macroeconomic roadmap towards an Upper Middle-Income Economy by 2030. The USD12 billion mining industry represents a 344% increase from the USD2.7 billion registered in 2017. The multi-billion-dollar industry will be driven by gold, platinum, diamond, chrome, iron ore, coal, lithium, and other minerals as follows:

The key deliverables of the mining roadmap are as follows:

  • Enhanced exploration;
  • Optimum benefits to the country and its people;
  • Increased exports and foreign currency generation;
  • Enhanced investment and capacity building;
  • Increased productivity and employment creation; and
  • Greater value addition.

Our recommendations: What should the GoZ do to achieve the USD12 billion economy?

Transparency International Zimbabwe (TI Z) believes that the USD12 billion mining economy can be realised. However, certain measures and policies need to be adopted by the GoZ and these are:

  • Expedite the enactment of the Mines and Minerals Bill into an Act in order to address transparency and accountability risks and vulnerabilities associated with the archaic Mines and Minerals Act of 1961. The proposed Mines and Minerals Bill should be grounded on transparency and accountability along the mineral value chain and should reflect the tenets of the African Mining Vision of having a “Transparent, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development.”
  • Formalise and decriminalise the Artisanal and Small-Scale Miners to optimize on their contribution to the economy. The formalisation of the sector should be coupled with incentives for the players to access mining claims and licenses at reasonable fees.
  • Take measures that promote the attainment of gender equality, equity, and women empowerment within the pursuit of a just mining sector.
  • Fulfil its commitment to join the Extractive Industries Transparency Initiative and implement its standards. Implementation of the EITI Standards establishes a systematic process for making data in the mining sector transparent and accessible. By joining EITI the government will be committing itself to assuring full disclosure of information along the mineral value chain- from how extraction rights are awarded to government revenues and how the public benefit from the sector.
  • Alternatively, adopt open contracting in the extractives sector, that is, the publication of government contracts from the awarding process to the monitoring and evaluation of contract implementation.
  • Make information on beneficial ownership easily accessible and verifiable. The GoZ must avail details about those who own extractive companies in the country and the ultimate beneficiaries.
  • Adopt a legal framework of fiscal terms that provide sufficient accountability to citizens, stability for investors and flexibility to respond to changing circumstances. This will enable the GoZ to review mining contracts in the event of policy changes.
  • Desist from giving harmful tax incentives and abolish the indefinite carrying over of losses in the mining sector.
  • Incorporate into the mining contracts provisions that impose obligations on the mining companies to respect human rights and the highest standards of environmental, social and health protection consistent with the United Nations Guiding Principles on Human Rights. This will create the basis for mining communities to report wrongdoing and assure them of prosecution of companies that violet human rights.

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Source: Transparency International Zimbabwe