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Afrochine seeks State protection

Chinese mining firm, Afrochine Smelting, is appealing for State protection amid  mounting resistance by some safari operators and residents objecting the granting of a special grant to the company in Hwange District in Matabeleland North province. 

Matabeleland North is one of the provinces in Zimbabwe endowed with vast natural resources including minerals such as coal bed methane, gold, coal and game.

In April this year, the Government issued Special Grant number 8 577 to Afrochine for a period of three years. Special mining grants are authorised by the President. 

However, the move is being objected by some stakeholders led by residents and safari operators arguing any mining activities in the area would have massive detrimental effects on safari business and livelihoods. 

The Greater Whange Residents Association claims the areas being targeted for exploration were within the confines of Hwange National Park, one of the largest wildlife sanctuaries in Zimbabwe.

However, the Zimbabwe Parks and Wildlife Management Authority, a national body responsible for custody of game in Zimbabwe, says the special grant is not within the protected areas and is not part to the team resisting the move.

In a statement yesterday, Afrochine said permission to explore for coal in the specified area was in line with “our investment plans”. 

“Ours is just a small effort towards achieving the country’s economic growth and attainment of an Upper Middle-Income Economy status as espoused by the Government, with the mining sector expected to contribute US$12 billion,” said the company. 

“We are doing this in terms of the law, including those governing the environment. We are appalled, therefore, that there are fresh attempts by certain forces under the civil society banner to derail these efforts through vexatious litigation or threats of litigation; bullying, harassment and politicking against our investments.

“We, therefore, call upon authorities to protect the legitimate interests of investors and provide an enabling environment where capital can thrive, in line with the ‘Zimbabwe is Open for Business’ principle.”

Upon assuming office, President Mnangagwa declared the mantra “Zimbabwe is Open for Business”, an investment theme that has been embraced by many countries and international businesspeople who have started developing interest in investing in Zimbabwe.  

Mines and Mining Development Minister Winston Chitando yesterday said he was yet to be briefed on the impasse. 

“I have not heard about that problem. I am yet to receive the report,” he said.

Afrochine said the ongoing war against companies operating in the mining and energy sectors in Hwange was driven by “selfish individuals and groupings whose operations have become a well-oiled machine to thwart development in the area and derail the legitimate national economic activities.”

Afrochine is a subsidiary of Tsingshan Group, which is building a giant carbon steel plant in Chivhu in Mashonaland East Province. 

When operating at full throttle, Tsingshan is expected to employ about 4 500 people. Afrochine operates the country’s largest ferrochrome plant located in Selous, 85km west of Harare. 

Chinese remains a major source of Zimbabwe’s foreign direct investment with companies such as Afrochine among largest investors.

The Government pins hope on mining and agriculture to provide quick economic turnaround and sustained efforts have been put in place to ensure the sectors provide employment and products for the export market.

Mining incentives 

Treasury has said will continue to extend incentives to the mining sector as part of efforts to boost mineral production.

Finance and Economic Development Minister Professor Mthuli Ncube, recently said his ministry had developed a supportive fiscal mining regime targeted at sustainably growing the industry.

The Treasury chief said he had given a number of incentives to players in the sector, as part of measures to optimise the mining fiscal regime in support of the industry.

These include reduction of corporate tax from 25 to 24 percent, deductibility of royalties for assessment of income tax, reduction of diamond royalties from 15 to 10 percent as well as sliding scale royalty system for gold, depending on global price levels.

Minister Ncube said this at the Chamber of Mines of Zimbabwe (CoMZ) annual conference held in Victoria Falls from June 3-5, 2021.

“We have additional incentives for the sector, Your Excellency, to grow the sector. All capital expenditure incurred for expansion or exploration development wholly or exclusively, is allowed in full,” he said.

The Finance Minister said any expenditure incurred in processing or acquiring mining rights may be allowed in full.

He said mining entities enjoy an indefinite carryover of tax losses while rebates on duty are granted to holders of a mining location, which during a specified period are imported exclusively or solely for mining operations development.

Further, he said rebate on duty was permitted on capital goods imported for mining operations development and during the exploration phase of a mining project.

The Government has put in place an incremental export incentive structure to boost exports. 

The system rewards miners for bettering their export performance from the previous two years, and can see a miner’s forex retention rising from 60 to 80 percent.

For players in the export processing zones, the minister said, retentions rise to 100 percent.

The sector is central to the achievement of National Strategy Development 1 (NDS1) and Vision 2030, by which Zimbabwe should be an upper middle-income state.

Minister Ncube said given mining’s   strategic importance, support measures will be given to make sure the industry graduates from simply extracting to mineral value addition as well as beneficiation.

Mining contributes 20 percent to Gross Domestic Product (GDP), accounts for 11 percent of fiscal revenue, which is primed to increase amid bullish NDS1 growth targets.

“For the mining sector, we project growth (for mining) of the order of 7 percent (per annum), which is above the NDS1 growth target of 5,2 percent, over the five-year period,” Prof Ncube told delegates. Herald

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