RESERVE Bank of Zimbabwe governor Gideon Gono yesterday said organisations with mineral prospecting rights should either use them or risk losing them, saying the current shortages of foreign cu
rrency in the country stemmed from under-utilisation of mineral rights.
Presenting his third-quarter monetary policy, Gono said where mineral rights were simply held for speculative purposes, or as status symbols it was the country’s economy that stood to suffer under the weight of the protracted foreign exchange shortages.
“The vast mineral endowments of the country are an immense area of opportunity that government should unlock through proper re-alignment of mining legislation in a manner that is transparent, objective and sensitive to investors’ concerns,” he said.
Currently, government requires that foreign-owned mining firms reserve 15% for locals, but government has since indicated the figure be revised to 40%.
Due to failure to raise foreign currency to pay for the 15% and to have broad representation among locals, this has resulted in foreign-owned firms failing to willingly offer stakes.
Gono said the government should re-align its legislation so as to make sure that the mineral resources are utilised fully.
“We therefore call upon the relevant authorities in government to re-align mining legislation to ensure that the country’s mineral resources are fully utilised,”Gono said.
The Reserve Bank governor said the legislation would transform the mineral reserves which he said were not utilised.
“Such a ‘use it or forgo it’ (attitude) will ensure that our vast coal bed methane gas, gold, platinum, nickel, asbestors, uranium, coal, and other mineral reserves are transformed from being a dormant heritage into an absolute wealth for the economy,” he said.
Government efforts to increase the involvement of a black elite in the mining sector have gathered momentum following the implementation of a similar drive in South Africa.
The legislation reverses the old mining regime which was skewed in favour of foreign investors and resulted in a handful of well-connected people enjoying most of the benefits in the mining sector.
Major companies that could be affected by the legislation include South Africa’s Impala Platinum Holdings (Implats) and Zimplats.