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Mining firms sell dummy on social investment



TOP companies in Zimbabwe mining gold, chrome, diamond and platinum have jointly disbursed only US$20 million in corporate social investments between 2018 and 2022, against generated revenue of US$5.5 billion, amid indications of a worsening resource curse, The NewsHawks has learnt.


This is happening at a time when mining communities have been crying foul over the non-payment of royalties by mining companies, while locals wallow in poverty.

For example, living conditions have continued to worsen at the resettlement facility in Arda Transau — where people who were forcibly moved from the Chiadzwa diamond fields were relocated — with communities failing to access water, while subjected to untold poverty.
Key infrastructure, such as Marange Clinic, has also been continually dilapidating, raising an outcry from watchdogs.

In 2007, the government declared the diamond fields protected areas under the Protected Places and Areas Act (PPAA) to pave the way for the exploitation of the gems. While promises were made to improve the livelihoods of the resettled families, most of the promises are yet to be fulfilled.

Findings by the Sivio Institute’s Mining Revenue Monitoring Index (MRMI) which tracks 10 mining companies, US$20 344 000 was given as corporate social responsibility, against revenue US$5.5 billion.

The MRMI enhances understanding of the mineral’s financial contribution of the mining sector to the country’s social development.

According to the index, gold mining companies Caledonia Blanket Mine, Falcon Gold, Kuvimba Mining House, RioZim and the Zimbabwe Mining Development Company (ZMDC) paid US$2 million in corporate social responsibility against US$313 in net profits and a tax payment of US$30.

The index also tracked revenue for three companies mining platinum; Mimosa, Unki and Zimplats, who racked US$3 billion in net profits, with US$497 million paid in tax and US$13 million paid to corporate social investments.  

Diamond mining companies RioZim, Anjin and the Zimbabwe Consolidated Diamond Mining Company (ZCDC) produced 15 million carats in the period under review, raking in US$896 million gross revenue, US$65 million net profit, while US$5 million was paid to corporate social investments.

Chrome mining companies Applebridge and Zimasco paid US$344 000 in corporate social investment.

Tensions are still rising in the Chiadzwa diamond-rich fields, with locals and civil society demanding transparency in the disbursement of royalties by the government and mining companies to the local community.

According to the Zimbabwe Diamond Policy (ZDC), which governs the extraction of the precious mineral, companies in the extractive industry are supposed to give 5% of their profits to the community for developmental purposes.

The state-owned Zimbabwe Consolidated Diamond Company (ZCDC) and Chinese company Anjin have been operating in the area.

More communities have been reeling under poor mining practices, with the residents of Raylton suburb in Hwange last year staging a demonstration over heavy dust pollution by mining companies whose heavy vehicles pass through residential areas, raising dust, which the locals fear could lead to a health disaster.

Villagers in Dinde area of Hwange district have also been resisting a coal-mining project spearheaded by Chinese-run Beifa Investments, which is projected to displace an estimated 600 families and damage the environment.

A total of 206 million tonnes of coal were discovered during exploration in the area. The mine will have a lifespan of 14 years.

A governance watchdog, the Centre for Natural Resource Governance (CNRG), says corporate social responsibility (CSR) is becoming a hollow slogan in Zimbabwe.

“CSR is almost dead because if you go to all mining areas in Zimbabwe, maybe with the exception of Zimplats, almost all the companies are surrounded by communities that are facing immense poverty. For example, roads are being destroyed by mining trucks. They do not even have the decency to repair the infrastructure,” said Farai Maguwu, CNRG executive director.

“And then, there is dishonesty by all mining companies in terms of disbursing revenues to the communities. That is where the error begins in that, when they give the community, say
US$20 000, it is US$20 000 of what? So, communities are given crumbs that fall off the table by the mining companies.”

Maguwu also said mining companies have been making fake promises on improving their communities of operation.

“When you look at Marange, I think the trick is to keep the community hoping until the last carat is taken out of the ground. They have been promising to give the community royalties since 2021. Until now, nothing has been done. So the plan is to hoodwink two people in the community and promise them something, and the goalposts keep changing!”

Maguwu said mining companies should be compelled to give back to communities by an act of law.

“When we use the word CSR, it is a wrong word. They should not do this as an act of charity. They must pay for the damage hence it should be at law. Companies should be compelled to pay a certain percentage, but there should be honesty on how much they are earning every year,” Maguwu said.

“CSR be an obligation, and not an act of charity. Because, it is undeniable that when mining is taking place, the community pays a cost in terms of degradation that the community has to deal with, during and after the mining itself. Communities continue to pay. They must breathe dust coming from the mines. They drink polluted water and they die. The fact that no one is talking about the health impacts of mining does not mean that people are not dying because of mining.”

Centre for Research and Development (CRD) director James Mupfumi agrees with Maguwu and says the Mines and Minerals Act should be amended to allow communities to enter into binding agreements with respective mining companies.

“CSR in Zimbabwe is not obligatory and mining entities are not legally bound to commit funds to community development. What needs to be done is a new Mines and Minerals Act that oblige mining entities to enter into community development agreements (CDAs) with host communities,” Mupfumi said.

Corporate social  investment expert Dr Andrew Chikowore says Parliament should craft legislation to guide companies and ensure that communities benefit from local resources.

“It is imperative to establish robust legislation governing the operations of mining companies in Zimbabwe, specifically regarding CSR. This would compel companies to fulfill their pledges and engage effectively in social responsibility efforts,” Chikowore told The NewsHawks.

Chikowore said it is important to strengthen the capacity of regulatory bodies such as the Environmental Management Agency (Ema), to monitor and enforce compliance with environmental regulations, to hold companies accountable for their mining activities, including rehabilitation of mined areas. 

“Far and wide, community share ownership trusts (CSOT) have been criticised for failing to have representatives from special interest groups, failure to engage communities in decision making, transparency on how received pledges were used and corruption, among others,” Chikowore said.

“Therefore, CSOTs need to be capacitated and strengthened so that they improve their transparency, governance systems and be accountable to deliver social development. CSOTs should be capacitated with business management skills to promote diversification and promote their sustainability.

“Additionally, CSOTs need to be empowered with enhanced transparency, governance structures, and accountability mechanisms to effectively deliver on social development projects. Capacity-building initiatives aimed at equipping CSOTs with business management skills would promote diversification and ensure their long-term sustainability in driving community development.”

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