10 July 2014

Zimbabwe: Mining Companies Must Play Ball


MINING companies in Zimbabwe have over the past few years been lobbying Government to review charges and levies saying they are making their operations not viable. The latest outcry by these firms is with regards to the 15 percent levy on the export of raw platinum, introduced in January this year, which is intended to nudge mining firms to establish beneficiation facilities to optimise returns in line with the Zimbabwe Agenda for Sustainable Socio-Economic Transformation cluster on value addition and beneficiation.

Admittedly, mining firms may have a point in that the cumulative effect of the various charges could have increased their costs in an environment everyone is battling to survive.

As such, the Government needs to diligently look into the situation to establish the veracity of claims by mining companies that the various taxes are hurting the sector.

While the Government implements the policy, there must be balance not to stifle the growth of the mining industry.

This is so because any additional investment into the sector will be partly supported by viability of the mining firms.

The Government must ensure the measures it takes to whip mining firms into line do not bite the hands that feed it, as its policies must grow not destroy industry.

Government must also critically examine the extent to which claims made by firms are true and respond accordingly.

This is particularly in view of the fact that there is a huge possibility that the aggregate effect of all the various mining charges might surely be hurting mining operations.

However, mining companies have taken long to buy into the Government's vision of optimising returns from extraction of the country's finite natural resources.

This has deprived the country of potential benefits including revenue, employment and infrastructure development.

In recognition of the abundant mineral wealth the country possesses, the Government identified mining as the cornerstone for economic growth in the medium term and mining firms have a major role to play in that regard.

Mining has already been classified as part of the four main clusters in Zim Asset, Government's medium term economic blueprint for 2014/18, with respect to value addition and beneficiation.

To demonstrate its seriousness about the need for value addition and beneficiation, the Government said it will ban raw platinum exports by the end of this year.

A progressive move indeed.


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