Zimbabwe: Mpofu Tightens Screws On Miners

MINES minister Obert Mpofu has tightened screws on platinum miners amid indications government will ban exports of ore in two years' time to compel them to establish beneficiation plants locally.

Mpofu this week repossessed 28 000 hectares of excess claims from Zimplats amid looting and speculation concerns, a development he says is to allow other players to invest in the sector.

He said the excess ground would be allocated to at least five new big investors, adding this would allow the country immediate benefits from its natural resource wealth. With the move, government intends to set the tone for what it sees as an industry-wide remedial exercise which, among other things, is expected to promote local beneficiation of all minerals.

The Mines minister said the decision was effective as at the time of the announcement, and similar developments, to be followed by close state monitoring, were expected in the next few months across the extractive industry.

Mpofu said platinum miners had to start providing implementation plans on how they were going to comply with the ore export ban. Platinum miners have been arguing it is not economical to have a refinery in Zimbabwe as output was too low.

Sources say the move is government's tough stance to deal with players who hold on to mineral claims for speculative purposes while cracking the whip on miners who have been making all possible excuses to avoid establishment of beneficiation plants locally.

A local mining expert told businessdigest the big platinum producers had invested in extra refining capacity in South Africa on the back of their Zimbabwean production and were therefore reluctant to make further investment in full value-addition of the mineral locally.

"They have been giving a lot of excuses, including that there is erratic power supply in Zimbabwe, whereas the refineries can be designed with their own power plants to run continuously," said the expert.

However, miners say Zimbabwe's lack of adequate power makes it difficult build refineries as they require lots of electricity.

Responding to questions from the media, Mpofu said government's decision to repossess idle claims was meant to encourage local beneficiation, plug mineral leakages and increase revenue collection.

"You know when Zimplats bought the platinum company from BHP they had some base metal refinery in Selous. The new buyers (Zimplats) had a refinery in South Africa, so they chose to refine there. We have taken an action which will remind them (Zimplats) to go back to their drawing boards and look at locally value-added products," said Mpofu, adding "We can no longer continue having our minerals refined outside the country because it is detrimental to our economic objectives and goals."

He said platinum producers had an option to convert Bindura Nickel Corporation's refinery unit into a fully-fledged beneficiation plant at a cost of about US$60 million.

The minister said platinum is referred to as part of the platinum group of metals (PGMs), meaning it contains a number of high value minerals like gold, palladium, rhodium and nickel, which are not declared at the time of export, but are extracted during beneficiation. As a result, the country had lost out on billions of potential revenue.

Geological information indicates the total ground granted to Zimplats and the mineral endowment therein has a lifespan of more than 400 years at an extraction rate of one million ounces per year.

Mpofu said he was also homing in on chrome producers like Zimasco whom he said were holding on to huge claims that were lying idle.

"Companies like Zimasco own the whole of Shurugwi and the Great Dyke, and make our local miners who don't have ownership their tributors and force them to sell to Zimasco for nothing. We are going to rectify that," he said.

"As you have seen we have cancelled licences for EPOs (Exclusive Prospecting Orders) and new investors are taking them up. There are people who have got coal concessions which they are not using and we will be cancelling that too. Some have speculated and sold what is not theirs and they will be in trouble."

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