Mineral Policy benefits mining sector
Published On June 18, 2014 » 2074 Views» By Moses Kabaila Jr: Online Editor » Business, Columns
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Policy analysis1TODAY, I want to refocus on some development in the mining sector by looking at the Mineral Resources Development Policy. The policy, which was launched on September 19 2013, is a revision of the 1995 Mining Policy which was designed to facilitate the development of private-driven mining industry through the privatisation of ZCCM mining units. Generally, the 1995 document is ascribed with the injection of US$5 billion Foreign Direct Investment (FDI) which followed between 1996 and 2011. In terms of new entrants, the policy accounts for Lumwana Copper Mine, Kansanshi, Muliashi and the closed Munali Hills Nickel Mine. It accounts for various other developments in the sector including the new smelters, increase in production and exploration works. While the production indeed rose by an average of 16 per cent between 2000 and 2011 from 250,000 tonnes to 819 574 tonnes per year for copper, the sector’s contribution to the Government coffers in terms of revenue was insignificant. For instance, while the sector contributes about nine per cent to the GDP its tax input into the Government treasury is a paltry 1.1 per cent of the GDP. This is chiefly due to the incentives in tax holidays which were given to the large-scale mining firm through the Development Agreements (DAs), which also resulted in feeble fiscal and regulatory frameworks. It is for this and many other reasons that the Government chose to revise the 1995 Mining Policy to come up with another which will, hopefully, address the emerging challenges well after the privatisation of the sector. “The minimal contribution of the mining sector to the treasury despite high metal prices and increasing production is one of the major challenges the Mineral Resources Development Policy (MRDP) has addressed,” partly reads the 12-page policy. Under the policy, the Government needs to achieve a strategic repositioning of the mining sector to balance between the interests of Zambians as natural stakeholders and those of the investors. This policy seems to rely deeply on the Vision 2030 for Zambia. It will contribute towards the creation of a sustainable and organised mining industry more beneficial to the country by attracting more investments, integrating the sector into local economy and ensure high standards of health, safety and environment protection. All these are key to the modern economies. Among the guiding principles for the implementation of the new policy include the Government commitment to ensure sustainable exploitation of mineral resources and commitment of a free-market enterprise economy. Others are the application of modern tenets of transparency, checks and balances and accountability as well as adherence to international conventions, while promoting Citizens Economic Empowerment (CEE). In all these, the Government aims at attracting private sector participating in exploration works, attracting the empowerment of Zambians to become shareholders in the mining sector and promotion of the integration of the mining sector into the local economy. To meet these aspirations, the Government will enhance the ability of the sector to grow and create wealth through exploration and actual mining, while maintaining an efficient computerised mining cadastre system for the mining rights administration. Further, the Government will regularly update the legal framework for the mining sector in line with the ever changing environment and promote large scale mining. The small-scale mining which is currently performing below par will be developed by, among many other things, facilitating access to finances. The Government will integrate the mining sector into the local economy by enhancing the contribution of the sector to the national economy. This will be done through the encouragement of the cluster development to link the sector with broader economy while also promoting linkages between the sector with other economic areas like agriculture. Other strategies include the improvement of the institutional framework, enhance of value addition, local auctioning of the gemstones, human resources development, research and development. The accountability and transparency in the management of mineral resources will be enhanced by strengthening the country’s membership to such bodies like the EITI. To promote the CEE in the sector the government will encourage major mines to float their shares on the Lusaka Stock Exchange for citizens to buy shares while further ownership will be created through CEE Act. Some legislation will be reviewed to reserve certain categories of mining rights and mineral for the Zambians, while at the same time reserve a portion of mineral royalty for the development of host communities. For comments/other contributions call: 0955431442, 0977246099 or email: jmuyanwa@gmail.com .

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