Over 300 miners gathered in the bristling mining town of Zvishavane on 13th June 2022 for the Southern Region Minex Expo and Conference to discuss challenges bedeviling the small to medium-scale mining sector.
The expectations were that finance, technology, health and safety issues would take prime spot in the ensuing discussions. Indeed most presenters zeroed in on these concerns until the question and answer segment opened up boiling anti-Chinese sentiment circulating among those gathered.
Speaker after speaker derided the Chinese for allegedly usurping mining claims and using superior technology, access to capital and political clout to crowd out locals from their own resource. Implicit in many of these pointed allegations, was Government’ complicity in aiding the state of affairs.
Mr Chivendere, a miner in the area summed it up by noting: “I am a war veteran, I fought for the independence of this country but I don’t understand why a Government that has supported us so much now prefers the Chinese at our expense. They give us sub par chrome prices and they take our claims. We want to know what is going on?” he said.
Among the reasons cited for the growing anti-Chinese sentiment in Zimbabwe’s mining sector is delays in amending the Mines and Minerals Act. This has resulted in the failure to distinguish between a small scale miner and a big mine investor.
While the politics of the country speak on the need to reserve small to medium scale enterprises to locals, the legalities of doing so are not yet in place. For the mining sector which is capital intensive, the Chinese who come from a growing resource consuming region, have an added advantage. Not only are they able to secure equipment and capital but have a ready market for extracted minerals especially chrome.
Tanzania has resolved this by coming up with a primary mining license which stipulates who a small to medium scale miner is and protecting the sector from foreigners. Zimbabwe says the amendments to the current mining act will for the first time define a small scale miner and come up with the necessary legal provisions to provide protection. Until then, it will be a fight been poor local miners and well connected and resource rich Chinese nationals.
The situation in the chrome mining sector demonstrates challenges of policies that on the surface appear well thought out but whose implementation point to glaring concerns. In the drive to ensure value addition, Government banned the export of raw chrome.
As per policy intention, new smelters have sprung up in the country. However, an unintended consequence of the chrome ban has been the creation of oligopolies who now dictate both price and quantity from the struggling small-scale miners who have no choice but to comply by either surrendering their claim or selling ore at sub optimal prices.
No wonder small-scale miners believe Government’s open for business mantra is directed at benefitting foreigners (read Chinese) at their own expense. This is made worse by the decision to do away with the Indigenisation Act without coming up with a successor legal framework.
The dilemma for the Government which is pro-people but must ensure the growth of the mining industry to USD 12 billion by 2023 can not be any clearer. On the one hand, big capital is needed to ensure mining growth. On the other most big companies especially those from China, bring equipment and personnel from their own countries. The trickle-down effect to locals is low and thus benefits are limited. The result is the increasing clash between these investors and local communities.
As Zimbabwe prepares for the 2023 elections one would expect that the tensions can only become more pronounced. When a similar situation took place in 2013, the diamond industry was nearly put on its knees. Fearing the cost of investing for the long term, investors sought to maximize gains by harvesting as much alluvial diamonds as they could. Not much was directed to long-term investments and exploration. Years later, that industry is still to assume the prestige and iconic status it had in 2010.
While the Chinese are close political friends of the Zimbabwean Government, they are shrewd businesspeople. All indications are that they sense the community anger against them. Like shrewd capitalists they too are likely to focus on exploiting as much as they can without tying themselves to long term commitments. As that happens not only are national resource quickly finished but benefits to the community become even lower.
The onus is now on Government to find a middle ground that ensures that as the country heads towards the USD 12 billion mining industry by 2023, in the words of President Mnangagwa “ no place and no one is left behind” . As it stands the overwhelming majority of small to medium scale miners are convinced they are way behind.