THE government’s political will to plug the illicit flow of minerals has come under scrutiny, amid indications that Treasury’s allocation to the ministry of Mines and Mining Development is insufficient to meet costs of amending the crucial legal framework on mineral resource governance.
Parliament has been calling for amendments to the Gold Trade Act and the Precious Stones Trade Act, whose loopholes have allowed the hemorrhaging of the country’s minerals.
Zimbabwe has been losing gemstones through illicit trade and undervaluation necessitated by a close-knit ecosystem of panners, security services and runners of merchants from Pakistan, Lebanon, China and India.
While the country has over 30 types of gemstones, only four are covered by the diamond policy, with the rest being mined by informal foreign prospectors.
A report by the parliamentary portfolio committee on Mines and Mining Development presented this week in Parliament has revealed serious gaps that are likely to affect mineral resource governance.
“A weak minerals legal framework creates gaps for effective mineral resource governance. The Mines and Minerals Amendment Bill lapsed with the 9th Parliament, hence it needs to be reintroduced in the 10th Parliament and is now overdue,” says the report presented this week by Remegious Matangira, Mines portfolio chairperson.
“The Committee notes that amendments to the Gold Trade Act and the Precious Stones Trade Act should be done. However, all this cannot be done given that the ministry was allocated on 22.9% of the total budget it needs to carry out the much-needed work. The 22.9% allocated can only cover one Bill, viz-a-vis, the amendment of the Mines and Minerals Act.”
The ministry of Mines and Mining Development was allocated a total of ZW$132 708 341 000 (equivalent to approximately US$22.9 million) in the 2024 National Budget, against a bid of ZW$696 billion.
This means the ministry received 19% of its budgetary requirements, which the committee says is likely to blight the fight against illicit mineral flows.
“Although the 2024 allocation to the ministry of Mines and Mining Development nominally increased by 440% from the 2023 revised budget, the figure only translates to only US$22 million using the interbank exchange rate. If one is to use the parallel exchange rate, the figure translates to a measly US$13 million. The prevailing high inflationary pressures threaten the effective implementation of mining programmes and service delivery,” reads the report.
“Minerals resource leakages continue to bleed the country’s much-needed mineral revenues, thereby reducing the sector’s the contribution to economic growth. This is despite the fact that the ministry of Mines is a member of Anti-Money Laundering system in Eastern and Southern Africa and that it collaborates with the Minerals Flora and Fauna Unit of the Zimbabwe Republic Police to curb mineral leakages. Zimbabwe is not fully benefitting largely due to these leakages.
“Under this activity, the ministry was allocated ZW$1.1 billion (2.75%) from a bid of ZW$40 billion. The Committee is concerned that the 2024 Budget did not address this serious challenge. Government should put in place measures to curb illicit financial flows through mineral leakages to increase revenue generation potential. This can be achieved through strengthening institutional mechanisms to curb mineral leakages. This can only be achieved through adequate funding.”
A natural resource watchdog, the Centre for Natural Resource Governance (CNRG), says the meagre allocation shows an unwillingness to fight the illicit flow of mineral flows as senior officials are implicated.
“It is obvious that there is no political will in plugging illicit mineral flows. The main problem is that officials within the government are the same who are involved in the illicit flows. It is difficult to separate state officials from the illicit activities,” said Farai Maguwu, CNRG director.
“Take a look at the Gold Mafia documentary by Al Jazeera. You can see that several government officials were involved, which raises concern. So, it is difficult for them to stamp out the practice, when they are benefitting from the entire practice.”
The extraction of gold under controversial circumstances is ongoing, with politically-connected elites in Mutare and Mutasa in Manicaland province partly responsible for granting access to mining pits, according to the CNRG.
Some of the gold is being extracted from Redwing Mine in Penhalonga, in Zimbabwe’s Eastern Highlands.
The mine, formerly under Metallon Gold, is now occupied by politically-connected elites like Zanu PF legislator Pedzai “Scott” Sakupwanya and senior civil servants.
His company Better Brands, with over 132 claims in Penhalonga alone, currently manages mining and milling operations at Redwing Mine.
Scott was exposed in the fourth episode of Al Jazeera’s investigative documentary as President Emmerson Mnangagwa’s man who was helping him build a war chest ahead of the 2023 general election.
Sakupwanya was last week imposed on Mabvuku-Tafara constituency in Harare by the Zimbabwe Electoral Commission (Zec), to replace the popular Munyaradzi Kufahakutizwi, from the main opposition Citizens’ Coalition for Change (CCC), who was recalled by impostor secretary-general Sengezo Tshabangu.
This is despite Sakupwanya having lost to Kufahakutizwi in the 23 August general election.
Another watchdog, the Centre for Research and Development (CRD) said government elites are the main actors involved in the illicit flow of minerals.
“In Penhalonga alone where about 744 hammer mills and cyanidation tanks are operating illegally. As a result of porous Better Brands (Pvt) Ltd mining activities at Redwing mine, Zimbabwe is losing between three to seven kilogrammes of gold every day to a thriving black market,” said James Mupfumi, CRD director.
“These porous mining activities are run by political elites some of whom are bulldozing themselves into policymaking institutions like Parliament to safeguard their business interests. It cannot therefore be over-emphasised that the political will to amend the Mines and Minerals Act, Precious Stones Act and Gold Trade Act has been lost as political elites continue to exploit a weak mining policy regime for personal benefits.”
CRD said lack of will to plug illicit mineral flows has been manifest in government’s failure to reintroduce crucial amendments to the Mines and Minerals Act, Gold Trade Act, Precious Stones Act and formulation of a policy on rare earth minerals, in the 10th Parliament, to plug the mineral leakages.
According to section 147 of the constitution, upon the dissolution of Parliament all proceedings pending at the time are terminated, and every Bill, motion, and other business lapses.
President Emmerson Mnangagwa did not re-introduce the amendments, sparking an outcry from civil society.