By Helen Zulu -
ZAMBIA’s major economic activity has been mining with the sector’s contribution to Gross Domestic Product standing at 13.5 per cent in 2014.
The mining industry accounts for about 86 per cent of Foreign Direct Investment and as at 2015, mining contributed about 70 per cent of export earnings.
The country’s major minerals are copper, cobalt, gold, emeralds,amethyst and coal and currently copper production stands at 711,515 tonnes.
The production of copper is expected to reach about 850,000 tonnes by 2017 due to increased projects that are likely to start operating next year.
Some of the projects include the Mopani Copper Mine Plc Nkana synclinorium project, the development of the South East Ore Body (SEOB) at NFC Africa Mining limited and the Konkola Copper Mine (KCM) Nchanga upper ore body.
The Lubambe Copper Mine, phase two to ramp up production to more than 45 000 tonnes with south east limb and Chifupu Copper project at Chibuluma Mine and among others.
However, production reporting by copper mines in the country has not been consistent as the industry has been having different statistics.
Over the years, the country has had instances where the Central statistics office (CSO) will have different production figures for a particular year and the Bank of Zambia (BoZ) will have different information for the same year.
This brought uncertainty in the quantification of the copper produced in the country.
It is for this reason that the European Union (EU) provided €4, 69 million to the Mineral Production Monitoring Support Project (MPMSP).
The objective of the MPMSP is to strengthen the ability of the Ministry of Mines and Minerals Development to fulfil its mandate to monitor effectively mining activities and mineral production in Zambia, and to share this information with other relevant Government agencies to increase domestic revenue mobilisation.
The project which was launched in 2015 is expected to conclude in 2018.
Mines and Minerals Development mining engineer Alexander Nyirenda says the project has already started delivering a number of benefits and will continue to until 2018.
Mr Nyirenda says some of the benefits include the design of an improved reporting format for monthly production reporting by mines known as ‘Form 34’ which has resulted in improved quantification of copper produced in Zambia.
Considering production reporting by the 12 largest copper mines in the country, MPMSP experts have queried a number of reports, resulting in an improved quantification of the copper produced in Zambia and some instances of under-reporting have also been identified.
“The “Form 34”, now in the General Mining Regulations which came into effect on January 1 2016 facilitates receipt of more complete reporting from the mines, as well as the possibility to understand the mines’ production and sale of all relevant products,” he explains.
The Project is being executed by Zambian and international experts under the leadership of the team leader Ron Smit and the key expert Michel Chapeyroux.
These experts are employed by Adam Smith International organisation heading the consortium also including the Revenue Development Foundation (RDF), Ecorys from United Kingdom and PMTC (Zambia) limited.
The MPMSP will further help facilitate improved regular mineral production reporting, which should help ensure that the royalties payable can be determined with greater confidence.
Mr Nyirenda says this will enable the ministry of mines and mineral development to be more equipped in its work as a regulator in the industry and there will be increased transparency in the reporting, receipt and interpretation of the mineral production of the country.
This increased transparency will reduce the opportunities for debate about mines allegedly not paying the royalties that they should.
“Officers in the Mines Development Department will benefit from the capacity building programmes that are planned for under the project.
“In the Mines Development Department of the MMMD, there is now a digital export permit system in place, to help speed up that particular procedure.
This was designed and implemented by consortium member RDF,” he adds.
Already, the laboratories at the Geological Survey Department (GSD) have had their water reticulation system, electrical wiring and air conditioning systems replaced.
The chemistry lab has received modern lab equipment procured under the project and the gemmological lab has received new equipment.
Potable X-ray Flourescence (XRF) units will be supplied to GSD and regional mining bureaus which will in turn translate into increased efficiency in the testing and evaluation of various mineral samples and resulting faster issuance of evaluation reports which are required for export permits applications.
Director of mines Mooya Lumamba says the ministry is proud to be the host and an active partner in the implementation of this project.
Given the country’s plentiful mineral resources, particularly copper and gemstones, the central role that mining revenues have to play in contributing to Zambia’s development is undeniable.
“It is the MMMD’s mandate to enable the optimal and transparent regulation and oversight of the mineral sector in Zambia, to ensure that the sector is contributing all it should to our country. This is an issue that is close to the heart of every Zambian.
“As the leading Ministry in charge of governing the mining sector in Zambia, we are committed to continuing to strengthen our systems and enhance accountability,” Mr Lumamba says.
He says the MPMSP, with the generous support of the European Union, has allowed the ministry to take several steps forward in this regard here at the ministry.
The improvement in the production reporting system in the mining sector will help to strengthen economic governance in Zambia.
Mr Smit explains that the MPMSP has seven work components focusing on themes such as enhancing reporting systems, building human capacity and procuring modern equipment to enhance the Ministry’s technical capabilities.
He says since its inception a comprehensive needs assessment was undertaken and delivered; brand new specialized laboratory equipment has been delivered to the MMMD, and the modernisation and digitalisation of the Ministry’s reporting systems is well underway.
Strengthening of capacity of the ministry of mines and minerals development will definitely enhance tax collection from mining through effective regulation and monitoring of the mineral production in the country.
It is therefore imperative that the ministry and all stakeholders in the industry work together to ensure that this project does not just end when the European Union team leave.
Effective production reporting plus a consistent fiscal regime will give confidence to would be investors in the mining sector in the country and government will be able to collect the right revenue from the sector.