13 February 2013

Zimbabwe: Govt Repossesses 27 948ha Platinum Reserves

GOVERNMENT has repossessed 27 948 hectares of excess ground with platinum reserves held by Zimplats that will be allocated to new investors as part of measures to boost mining activities.

Mines and Mining Development Minister Obert Mpofu said yesterday that other mining companies across the entire sector would also have excess land repossessed by the Government.

Apart from repossessing excess ground held by mining firms, Government would ban the export of semi-processed platinum in two years to compel mining companies to set up a refinery in the country.

Addressing journalists in Harare, Minister Mpofu said the repossessed Zimplats mining ground would attract at least five new big investors.

He said Zimplats was granted a Special Mining Lease in 1994 to cover 25 years of mining activity, but new geological information indicated that the ground and mineral exceeded the prescribed period.

Zimplats, the minister said, would be left with mining ground to sustain it for several years.

Geological evidence suggests that at the current rate of platinum extraction of a million tonnes per year, it would take Zimbabwe over 400 years to exhaust the known reserves of the precious metal.

Minister Mpofu said Government would not wait that long when there were many investors keen to mine.

"Let me assure you that the ministry will exercise its prerogative to ensure that all idle ground is repossessed and re-allocated to other investors.

"This exercise is definitely going to spread to all other sectors in the mining industry to encourage expected high levels of mineral productivity."

Government, in terms of the Mines and Minerals Act which stipulates that mineral rights are vested in the State through the powers of the President, will not compensate mining companies for repossessed excess ground.

Minister Mpofu said repossessing of excess ground was part of a raft of measures that Government generated to stimulate mining activity in line with growth targets envisaged in the Medium Term Plan.

"To that end and following protracted discussions on the release of excess ground, my ministry is taking a step forward to repossess excess ground from Zimplats measuring 27 948 hectares," the minister said.

Minister Mpofu said repossessing excess mining ground would prevent speculative tendencies by investors on the idle ground.

Government, through amendments to the Mines and Minerals Act, has been trying to put an end to speculative tendencies by investors who obtain Special Grants or other mining titles, but fail to develop the ground.

The Government is contemplating repealing the whole Mines and Minerals Act.

Minister Mpofu said for a long time the country had not realised significant value from the platinum industry beyond traditional statutory payments, hence the need for local value addition of minerals.

"Consequently, the ministry has decided that beyond two years, it will stop processing exports for semi-processed platinum products," he said.

"This is expected to give way for companies to begin channelling resources towards value-addition through establishing a platinum group of metals refinery in the country."

Minister Mpofu said Government had awoken from its slumber and was now well aware of all the trickery by mining companies and the prejudice it suffered in terms of potential revenue to the fiscus.

He said the country had only benefited meaningfully from diamond mining activities in Chiadzwa where, through the Zimbabwe Mining Development Corporation, it was in partnership with most investors.

The minister said the Government benefited more from its diamond mining activities through joint ventures in Chiadzwa in six months than it had from the entire mining sector over the last 10 years.

Minister Mpofu said platinum exporters did not fully account for all the mineral contained in the semi-processed exports and cited an investigation by Alex Stuart International, which revealed that Zimplats owed the Government more than US$300 million from minerals that were not properly declared.

The Government is in the process of consulting on the possibility and manner in which it can recover the funds that Alex Stuart concluded it was prejudiced of through improper export declarations.

Copyright © 2013 The Herald. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.