Govt repossesses 5 000 mining claims, 50 000 lose jobs

Oliver Kazunga/Bianca Mlilo, Business Reporters
MORE than 5 000 small-scale gold mining claims in Matabeleland North and South provinces have been forfeited to the State after claim holders failed to remit tax.

Small scale miners are required to pay a $100 levy to the State annually. The Zimbabwe Miners’ Federation (ZMF) first vice president, Mr Ishmael Kaguru, told Business Chronicle yesterday that their members were failing to pay the levy as they were “burdened” with multiple tax obligations to various Government departments.

“According to our records, 5 267 gold mining claims in Matabeleland North and South provinces have been forfeited to the State. As a result, more than 50 000 people in Matabeleland are out of employment.

“We’re still in the process of compiling a national report to establish the total number of claims that have been repossessed,” he said adding that ZMF was engaging the Government to make payment plans.

“It’s not that our members don’t want to pay the required levies to the Government but at the moment they are burdened with a multiplicity of taxes which they also have to pay to local authorities and the Environmental Management Agency among others.

“The taxes are just exorbitant to the small-scale miners. As small-scale miners, we’re targeting to produce 10 tonnes of gold this year, but with this forfeiture, how do we then manoeuvre to achieve the set target?”

In 2012, the Government imposed a levy hike, which saw some fees increasing astronomically making Zimbabwe one of the most expensive countries to mine.

Last year, the small-scale mining sector produced seven tonnes of the yellow metal up from three tonnes in 2014.

Since the beginning of the year to date, small-scale miners have delivered about 6,5 tonnes of the yellow metal to Fidelity Printers and Refiners. In the past, the small-scale miners through ZMF have expressed concern over the multiple taxes they were being charged and urged the Government to address the matter so that they boost gold production.

Meanwhile, miners’ representative bodies say they are engaging the Government and financers to            consider taking mining claims as collateral for loans taken under the $20 million loan facility for small scale miners.

The package was unveiled by the Reserve Bank of Zimbabwe and Fidelity Printers Refineries (FPR) in Bulawayo last week. However, miners say the conditions for accessing the loan facility are stringent and disqualify many from accessing the facility.

The facility requires small scale miners to produce collateral of at least one and a half times the loan value, which will attract an interest rate of 10 percent.

For miners who require a loan of $15 000 and below, collateral should be in form of movable property like livestock and vehicles while for anything above the amount, miners will require collateral in the form of mortgage bonds. This has raised concerns within the artisanal mining sector, with the small scale miners feeling excluded from the scheme amid fear that the funds might end up in the hands of large and well established miners.
Zimbabwe Artisanal & Small Scale for Sustainable Mining Council (ZASMC) president Engineer Chris Murove yesterday said the list of requirements do not meet circumstances of miners.

“Most of these small scale miners do not have security; all they have are their gold claims. It would be good if the authorities could consider these claims as security, including the equipment they would have sponsored,” said Engineer Murove.

“The reason for this type of security primarily is to ensure that the loan recipient pays; so because that’s all they have, they will pay.”
Zimbabwe Miners Federation (ZMF) chief executive officer Mr Wellington Takavarasha said to this effect, they would engage the apex bank and FPR in a roundtable meeting to iron out these issues.

“Government wants to meet the 10 tonne-target set for small scale miners and is committed to make this happen. We’re pushing for the approval of the facility for deserving projects,” he said.

Mr Takavarasha said ZMF, as an arm of the                        Ministry of Mines and Mining Development, had assembled a group of technical personnel to assess the value of minerals in the claims that artisanal miners hold.

The team, made up of geologists, metallurgists and engineers, will report back to the Ministry of Mines.

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  • Buffalojump

    This is going to provide confidence in investing in Zimbabwe how?
    Who will get the best producing small mines?
    How do the 50,000 workers support the famlilies?
    How do these workers pay for school fees?
    How do governments make up for revenue lost through other fees collected from these claims?
    Why in Matabeleland?

    I guess those who created the poor economic situation are the best ones to ensure it continues.