6 July 2017

Zimbabwe: Mines Ministry Triggers Chaos in Mudzi

Parliament has accused the Ministry of Mines and Mining Development of "sleeping on duty" and causing chaos in Mudzi district's gold rich Makaha area in Mashonaland East province, resulting in the proliferation of illegal miners.

In a report recently tabled before the Senate, the Parliamentary Committee on Indigenisation and Empowerment said delays by the Ministry to forfeit mining claims from companies and individuals unable to pay their annual inspection fees had resulted in the explosion of illegal miners, who have caused chaos and massive environmental degradation.

The legislators, led by ZANU-PF Harare Senator Charles Tawengwa, recently toured Mudzi and Mutoko districts to investigate complaints surrounding the non-establishment of Community Share Ownership Trusts (CSOTs) in the two districts.

During the tour, the committee discovered that despite the area having substantial gold, black granite, manganese and tantalite resources, Treasury was not benefitting from the mining activities due to rampant illegal mining while external investors were extracting minerals without proper documentation.

Mudzi district has 113 registered gold locations, according to the Ministry of Mines.

Most of the claims are in the Makaha area. There are also 25 registered black granite mining locations in Mutoko and eight in Mudzi.

However, in its report, the Parliamentary committee blamed the Ministry for fuelling the illegal mining activities in Makaha due to its failure to regulate mining activities in the area.

"The Ministry of Mines and Mining Development must timeously forfeit mining claims upon failure by the owners to make the annual inspection fees payments and open ground for other potential companies," the committee noted in its report.

One of the companies identified by the report as having failed to pay its annual inspection fees was Kilwright Mining Company, which owns vast gold and tantalite claims and is owned by Harare lawyer, Gerald Mlotshwa.

The company had not paid annual inspection fees since 2012.

This resulted in over 700 illegal miners invading the mine. Police failed to control the illegal mining, citing transport challenges.

"The committee noted that the Ministry of Mines and Mining Development slept on duty when it delayed to forfeit the block claims of Mr Mlotshwa resulting in him holding on to them for five years without producing anything that contributed to government revenue and to the CSOT. The Zimbabwe Republic Police has no vehicles to enable them to effectively monitor illegal mining activities in the area," the report said.

Mlotshwa took over the mine from Tantco, a privately owned company in 2011 and has failed to go into production after a $250 000 deal with a foreign investor fell through.

During the visit, the committee was also informed by officials of some of the mining companies that the ease of doing business in Zimbabwe was being seriously affected by high government taxes and punitive requirements.

"The committee was informed that in 2010, Natural Stone Export Company employed 1 200 workers with more than 40 managers, but now it has 179 workers and only two managers. This was attributed to the high costs of doing business in Zimbabwe. The mine manager stated that the ease of doing business is better in other countries compared to Zimbabwe where too many taxes are levied.

The committee said lack of a conducive environment for doing business was a bottleneck to economic growth and undermined the implementation of the Indigenisation and Economic Empowerment Act.

"The committee also noted that if most of the major mining activities in Mudzi and Mutoko were rationalised, the mining companies would be able to absorb unskilled labour and create employment opportunities of about 80 percent of the local people," said the report.


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