By Business Reporter – Tuesday 17 November 2020
HARARE (Mining Index) – THE National Development Strategy 1 (NDS1), government’s economic blueprint running from 2021 to 2025 is set to expedite the formulation of Rare Earths Minerals Policy.
Global demand for rare earth elements (REEs) has grown significantly in recent years driven by the increased use of rare earth permanent magnets in key markets including electric vehicles (EVs).
Zimbabwe sits on bountiful and lucrative deposits of rare-earth elements (REE), some of which sell for more than US$1 000 for a single kilogram.
Rare earth elements are a group of 17 chemical elements .REE are all metals, and the group is often referred to as the rare earth metals used in renewable/green technologies, military equipment and various high-tech consumer electronics such as computer memory, DVDs, rechargeable batteries, cell phones, catalytic converters, magnets and fluorescent lighting.
“Zimbabwe has 19 of the world’s rare earth minerals. In order to designate these strategic assets and direct investment into their exploitation, Government, during the NDS1 Period will expedite the formulation of Rare Earths Minerals Policy,” said President Emmerson Mnangagwa while launching the economic blueprint at State House in Harare yesterday.
“This will be realized through finalization and implementation of policy and legislative frameworks such as mineral specific policies, review of the Gold Trade Act, Precious Stones Trade Act and amendments to the Mines and Minerals Act,” he said.
Zimbabwe is endowed with over forty minerals including gold, Platinum Group of Metals (PGMs), diamonds, coal, gemstones, granite, manganese, chrome, lithium, asbestos, iron ore, copper, nickel, cobalt, limestone and coalbed methane (CBM).
Government has not been approving Exclusive Prospecting Orders (EPO) despite mineral exploration being vital for mineral resource quantification. The country has thus lagged behind in terms of new discoveries and large-scale investments.
During NDS1, Government is expected to prioritise approval of Exploration Title and capacitation of Mining Promotion Corporation to undertake targeted exploration.
Compounding to challenges of limited exploration are vulnerabilities related to inadequate scrutiny around agreements with investors, including fiscal concessions.
In order to bring transparency and fair share of Government in minerals exploitation, NDS1 will prioritise formation of an investment committee comprising of OPC, Ministry of Mines and Treasury, chaired by ZIDA in assessing capable investors and overseeing investment agreements.
During the NDS1 Period, operationalization of the automated Mining Cadastre Information Management System will be accelerated to increase efficiency and transparency in mining title management.
In addition, priority will be extended to formalisation and capacitation of the small scale miners through the Mining Industry Loan Fund. To prevent speculative hoarding of claims across all minerals, Government will strengthen the enforcement of the “Use It or Lose It” principle.
The country has hardly realised the full value of its mineral resources due to leakages. These take the form of transfer mispricing, smuggling and under declaration.
Government, during the NDS1 Period will prioritise plugging of mineral leakages. In order to curb under declaration, Government will upgrade its Metallurgical Laboratory to meet internationally accredited standards and ensure mandatory valuation of all export consignments. This will be complemented by installation of weigh bridges at all ports of exit.
To reduce smuggling, Government will strengthen metallurgical accounting by capacitating the monitoring and surveillance under the Minerals Marketing Corporation of Zimbabwe (MMCZ) and the Minerals Fauna and Flora Unit.
Capacity by the Zimbabwe revenue Authority (ZIMRA)to address transfer mispricing of minerals shall be enhanced.
Unlocking the mining potential requires guaranteed long term financing. During the NDS1 period, establishment of a gold reserve fund will be prioritised as a vehicle to mobilise finance. This will be complemented by setting up of a minerals commodity exchange, except for gold.
Growth of the mining sector will be anchored on opening of new and resuscitation of closed mines, projects expansion, increased capacity utilization, and value addition and beneficiation. Key flagships during NDS1 include platinum, chrome, gold and coal projects.
He acknowledged that weak governance in the sector has been the major limiting factor. In order to achieve increased and sustained growth in the mining sector, priority during the NDS1 Period will be to improve the ease of doing business. ENDS