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The EPOs debate: small-scale miners face extinction

“EPOs are often used to window dress investing companies back in their home countries as capital raising initiatives. These investors apply for an EPO here in Zimbabwe, go back to their country and publish the EPO on their stock exchanges, grow their shares then milk from that. Once that is done, they rarely come back to inject the capital raised into the EPO.”

By Lucy Tandi 

HARARE (Mining Index) – THE DEBATE on Exclusive Prospecting Orders (EPOs) has seen Artisanal and Small-Scale Miners (ASM) across the country locking horns with the Ministry of Mines and Mining Development, objecting to the issuance of EPOs.

An Exclusive Prospecting Order (EPO) is a large area of ground targeting selected minerals for exploration.

According to the Mines and Minerals Act, Section 93(2), the maximum area for any other mineral, excluding coal, mineral oils, natural gas, and precious materials is 65 000 hectares. Section 93(2)(c) speaks to a minimum of 2600 hectares.

An EPO confers exclusive rights to prospect for specified minerals in any identified location within Zimbabwe.

The EPO tenure is three years and can be extended by a further three years to take the maximum tenure to six years.

According to Section 93(3) of the Act, the EPO area may be extended subject to certain conditions.

This would need an act of parliament to change it.

Currently, there is no legal provision as to the period on which either EPO or mineral application registration is supposed to be effected.

There is also no legal framework for local miners or prospecting miners to have an oversight role on concession holders (EPO holders) on their programme of work and submission of reports to the director of geological survey during the tenure of their EPO.

An EPO is for exploration with an expiry period.

If a discovery is made within the EPO, the explorer pegs a claim over the deposit. The rest of the hectares are relinquished. Hence, no EPO holder is entitled to unutilised land of an EPO.

It is estimated that around ten percent of EPOs make a find and such discovery usually covers less than 5 percent of the land granted in the EPO grant.

In true sense, an EPO cannot be regarded as an investment, but an intention. Minerals are not found on every portion of the land covered by the EPO.

Some say over 90 percent of EPOs result in no economic discoveries meaning that land becomes free again after the tenure expires.

There are no legal rights attached to an EPO application, save for an administrative right to have the application processed in terms of the law.

Business Economic Empowerment Forum (BEEF) Governor for Mining, Tichaona Mutangi said the issuance is EPOS serves as a reminder to the world that Zimbabwe is on a major economic turnaround, respects private property and allows the world to see that its government can honour the objects and terms of the EPOs.

“There has also been an increase in indigenously owned EPOs which to us as BEEF, is a very good sign of good times to come,” said Mutangi.

Mutangi also took time to shed light on some demerits of the EPOs in Zimbabwe’s mining sector.

“EPOs are often used to window dress investing companies back in their home countries as capital raising initiatives. These investors apply for an EPO here in Zimbabwe, go back to their country and publish the EPO on their stock exchanges, grow their shares then milk from that. Once that is done, they rarely come back to inject the capital raised into the EPO,”

“Small-scale miners do not take years to define a resource because they lack capital to define the resource. They define the resources as they mine. EPOs kick out small-scale miners until the EPO has expired. This is against every African initiative to grow the indigenous mining and processing,”

Mutangi further alludes that companies or individuals that have been granted EPOs have an unscrupulous tendency as some start mining on the EPO upon application before the EPO is granted. This means EPO applicants use the EPO application that is yet to be responded to.

“When an EPO has been applied, prospecting miners are not allowed to prospect on that round. The EPO application holder is given time to explore. From application, processing and extension can take up to 9 years with, 65 000 hectares of land being held by one company or person,” said Mutangi

Continued issuance of EPOs has caused the rise of conflict between artisanal and small-scale miners and government where the ASM sector has claimed on various occasions that they have been interdicted from mining by a potential applicant of an EPO.

Small scale miners say they can no longer peg any space for title because most of provincial space is covered under EPOs.

Purchase of prospecting licenses is allowed and permitted only on areas open to prospecting though the right is granted at the same time denied by the situation on the ground.

EPOs have over the years given mining companies express rights to search for minerals and peg claims in designated areas but there has been concern that some firms are not scouting for minerals and are only holding EPOs for speculative purposes.

Few privileged individuals have been hording EPOs, before parcelling them out to desperate small-scale miners as blocks, to small scale miners at exorbitant prices.

Small-scale miners have over the years been calling on government to expedite tightening of rules and regulations governing the administration of EPOs, which they say are not serving any tangible purpose.

For instance, it is believed Matebeleland north province has 95 percent of mineral land under EPO applications with a paltry 5 percent as arable communal land.

‘Most EPO applications breached section 87(1) of the Mines and Minerals Act in conjunction with section 35 which states that the chairman shall give directions to mining commissioner to reserve ground under application by posting a notice. This, however, did not happen during issuance of most EPOs. Hence, there is gross violation of the Mines and Minerals Act. This can be referenced from reservation books at various Mines and Mining Development provincial offices,’ said Zimbabwe Prospectors union (ZPU) president Samson Dzingwe.

Mines and Mining Development Minister Winton Chitando’s target to attain a US$12 billion mining economy by 2023 has been welcomed by many, although most differ on the road to take to achieve the target.

Dzingwe also queried how Zimbabwe can achieve the US$12-billion-dollar mining dream if the country remains largely under EPOs, ignoring the fact that the ASM sector has been contributing largely to gold production in the past decade.

Artisanal miners have queried the validity of EPOs, alleging that some EPOs have exceeded the three-year benchmark, while some have continued for up to 15 years, denying the ASM sector the right to prospect and peg in such areas.

Dzingwe, who has coined issuance of EPOs as ‘speculative’ EPOs believe government must reserve some mining land in all provinces for small-scale mining.

“Most of the mineable areas suitable for small scale mining business have been blanketed or carpeted with speculative Exclusive Prospecting Orders (EPOs) which now hinder, block, shrink and to a certain extent extinct small-scale mining business when everyone knows and it’s on record that small scale miners produce more in terms of the yellow metal ahead of large-scale miners,”

“This has caused failure in meeting government’s target of 40 tonnes of gold yearly. Speculative EPOs have contributed greatly to the failure and have resulted in many prospective miners becoming illegal miners due to failure to acquire suitable mineable areas to start mining are closed out for prospecting and pegging due to these speculative EPOs blanketing the whole country. This is retrogressive to attainability of a US$12 billion mining economy and the growth of small-scale mining industry,”

“Government should have reserved certain mineable lands across all mining provinces for small scale mining sector. Government must formulate policies that seek to empower all stakeholders, thus encouraging participation and involvement of all players and coexistence in the exploitation of our mineral wealth,”

“The Ministry of Mines must engage or consult all stakeholders, encourage productivity, build trust and encourage working together between government and mining stakeholders towards development of the mining industry and country at large,” said Dzingwe. ENDS//

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