HomeBusinessExpert proposes UAE-style mining firm

Expert proposes UAE-style mining firm

BY MTHANDAZO NYONI

ZIMBABWE should establish a national mining company for all major minerals for citizens to benefit from their natural resources, according to academic Ramphal Sillah.

In a presentation at the Zimbabwe Alternative Mining Indaba  held in Bulawayo last week, Sillah, a lecturer at the Midlands State University, said the current system promoted individualism.

“This is something that must be established. This is one big company responsible for mining all major minerals in Zimbabwe,” Sillah told the indaba.

“This capitalist approach we have right now breeds an essence of disorganisation and individualism and no country has ever developed under such a scenario which we currently see in Zimbabwe.

“If you look at countries like Norway, for example, they have managed to benefit from their own resources through one major company owned by the state.

“If you look at the United Arab Emirates (UAE), they have managed to do so through the Abu Dhabi National Oil Company.

“If we want to see benefits from our mineral resources, we must have one big national company that must take over.”

Sillah said in order for that company to be formed, all Zimbabweans must be shareholders.

“There are about 14,5 million Zimbabweans,” he said.

“If each of us contribute at least US$1 we will raise US$14,5 million which means we can capitalise our Zimbabwe mining company.

“At the end of the day, we are going to get profits from our shares and all Zimbabweans will get a share or a deposit at the end of the day or profit from our minerals.

“Maybe that’s the only way Zimbabweans can benefit from their minerals.”

In Zimbabwe, the mining sector is currently dominated by multinational corporations.

But government already operates the Zimbabwe Consolidated Diamond Mining Corporation and the Zimbabwe Mining Development Corporation.

The two firms have interests across several mineral sectors, including gold, diamonds and asbestos.

The challenge with multinational enterprises, according to the International Monetary Fund, is that they avoid paying taxes.

Sub-Saharan African countries have been losing between US$470 million and US$730 million per year in corporate income tax.

Sillah said Zimbabweans should advocate for the establishment of the Zimbabwe National Resource Commission, an independent body monitoring mineral resources, as well as investigating problems in the mining sector.

He said commissioners for such a commission should be chosen by citizens who will also measure their performance.

Sillah said the country should also establish special national resources and corruption courts to expedite trials of cases of corruption in the mining sector.

“In Zambia they introduced what is called gender-based -violence (GBV) courts where perpetrators are tried immediately, convicted and jailed and cases of GBV dropped,” he said.

“Maybe if we have such special courts cases of corruption in the mining sector will drop.”

Zimbabwe’s mining sector plays a significant role in the development of the country though foreign currency generation.

Since 2009, the mining sector has become the fastest growing with both small-scale mining companies, artisanal miners and multinational companies taking part in a gold rush.

But as a result of illicit financial flows, Zimbabwe has been losing money through gold smuggling, mostly to South Africa.

Reports say black market dealers have been smuggling US$1,5 billion worth of gold annually.

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