Proposed command mining likely to fail

Government’s proposed command mining is bound to fail due to mismanagement of resources, corruption, poor planning and policy inconsistency which has become synonymous with Zimbabwe, critics have warned.

Government, through the ministry of Mines and Mining Development, is planning to introduce command mining as part of measures to ramp-up mineral production in the country.

The proposed model draws inspiration from the command agriculture scheme being championed by government under the ZimAsset’s food security and nutrition cluster.

Under the proposed scheme, the country’s gold mining sector targets to deliver 32 tonnes of gold to Fidelity Printers and Refiners this year, up from 28 tonnes achieved last year.

The scheme aims at capacitating small-scale miners, proposes to prioritise taking control of land that is rich in ore and easy to work on, allocation of mining claims in reserved areas to small-scale miners, implementing the “use it or lose it” policy on mining claims as well as easing or reducing mining costs and speeding-up of mining registration processes.

Critics have, however, dismissed the programme as a failure, citing corruption and nepotism.

A miner who preferred anonymity said the scheme was bound to fail due to corruption, lack of supportive regulations, reliable sources of funding and absence of incentives.

“We fear the worst for this programme because the people have lost confidence and trust in this government. We fear that our resources will be looted and that miners will be abused. There is too much corruption and nepotism in Zimbabwe,” the miner said.

Small-scale miners who spoke to The Standard said they had no idea how the programme would work.

The programme comes at a time the government has upped its efforts to take more land from Zimbabwe Platinum Mines (ZimPlats) and claims from Zimbabwe Alloys – a development critics say was being done to accommodate command mining.

Under the “use it or lose it” policy, government has expropriated a combined 42 000 hectares of land from the country’s two largest ferrochrome producers — Zimbabwe Mining and Smelting Company and Zimbabwe Alloys saying it needed to open the sector up to new players.

Implats subsidiary, Zimplats, the country’s biggest mining business which gave up ground covering 51 million ounces (36% of its total resource) out of a total 141 million ounce resource in 2006, has this time objected to the government’s planned seizure of more claims, prompting government to approach the courts for an order authorising the acquisition of the land.

Critics say a command economy model, which has largely failed elsewhere around the world, was also likely to fail in Zimbabwe, especially due to lack of co-ordinated planning and policy inconsistencies.

In a command economy, government, rather than the free market, determines what goods must be produced, how much should be produced, and the price at which the goods must be sold. In other words, the state and not the market, determines the production and distribution of goods. Industry and business are largely publicly-owned; it’s a key feature of socialist or communist societies.

Policy analyst, Butler Tambo said as long as looting and leakages in minerals was not stopped, command mining would never yield the desired results. If anything, he said; “it will only chase away potential investors from the mining sector”

“The real problem is not in command mining but it is in the management structure of most parastatals that the government runs. They are loss making and seriously mired in corruption and so the same is easy to happen with command mining,” Tambo said.

“For as long as mismanagement of resources and corruption is not dealt with, command mining will be as good as jumping from a frying pan into a fire.”

He said lack of transparency and accountability at parastatals in Zimbabwe was largely a result of lack of sufficient conditions and mechanisms for regulation and enforcement of corporate governance rules.

“These weaknesses create conditions and opportunities necessary for corruption and lack of transparency and accountability to manifest.

Perhaps the notable weakness in the legal framework governing parastatals is the amount of unfettered ministerial discretion enjoyed by ministers whose ministries oversee parastatals,” Tambo said.

Economist John Robertson said the word “command” was popular with government as it fitted well into their central planning philosophy, but applying central planning to mining led to a fall in mining output everywhere it has ever been tried.

“But it might help this government to bully gold panners,” Robertson said.

Another economist, Reginald Shoko, said the scheme might be a good initiative in the short-to-medium term but definitely “it will fail in the long-term due to government red tape which normally promotes corruption and nepotism”.

“Government needs to address the issues around the formalisation of the small-scale miners where most of the mineral leakages are currently being experienced,” he said.

“It also needs to look into the power generation that affects the productivity of the mining sector. Having minerals underground does not guarantee prosperity unless measures are put in place to produce”.

Zimbabwe Miners’ Federation (ZMF) spokesperson, Dosman Mangisi however, said the scheme would be a success.

“We support the scheme as small-scale miners. Actually, it’s a shot in the arm which is set to increase production in the sector,” he said.

Mines deputy minister, Fred Moyo could not be drawn to discuss the programme, arguing it was yet to be launched.

“We have not yet launched the scheme. It’s something that was just mooted,” he said.

ZMF CEO, Wellington Takavarasha, said they had outlined the proposed programme of action in the mining sector and identified stakeholders but they were yet to meet with Mines minister, Walter Chidakwa.

But according to a circular prepared by ZMF for the small-scale miners, there is need to review the Gold Trade Act to allow for the handling and transportation of gold to buying centres, engaging banks to accept gold sales and geological survey reports as collateral.

It also suggests that the Reserve Bank of Zimbabwe’s $40 million facility be used to mechanise existing small-scale mines and then invite private capital for new entrants.

Identified partners for the scheme include ministries of Mines, Finance, Justice, Water, Energy, Rural development, the police, the RBZ, mining unions, financial institutions, School of Mines, research institutions and local leadership.

BY MTHANDAZO NYONI