Mutambara calls for mineral database

country’s mineral reserves to avoid getting raw deals when negotiating with investors, Deputy Prime Minister Arthur Mutambara has said.

He made the remarks at the 74th annual general meeting of the Chamber of Mines of Zimbabwe at Troutbeck Resort in Nyanga last week. The meeting was held under the theme: “Where to from here; Managing and developing the mineral wealth of Zimbabwe for tomorrow”.

Zimbabwe has for years not invested in exploration as the process is expensive and has a low rate of success in terms of achieving desired results.

DPM Mutambara said Government should find the money to finance exploration in order to build a data- base of the country’s underground mineral stock for a full appreciation of the value investors should pay for a right to mine.

“Government must find the money to make sure that we do the geology, the exploration to get the understanding of the value of minerals in the country. If we do the geological numbers we will know the numbers,” he said.

“As Government we must pay for exploration. We must put our money where our mouth is. If we do not do that (invest in exploration), we will always be shortchanged by those with better information than we have.”

Outgoing Chamber of Mines president Mr Winston Chitando said Zimbabwe was under-explored, and attributed this to the high cost of exploration.

“Zimbabwe is under-explored; it has not been subjected to modern techniques of exploration. Exploration is very risky, especially on virgin ground. The chances of success are between 0-5 percent,” he said.

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He singled out the deals with Zimplats (platinum) and Essar (iron ore) and Diamond Mining Corporation (diamonds) as examples of bad investment in which Government did or would not fully benefit because it did not fully understand the stakes.

Conservative estimates are that Zimplats is holding on to about US$4 billion worth of platinum ground and Essar would have taken under its belt in excess of US$20 billion in iron ore reserves, had the deal sailed through in its original form.

While reservations abound on these valuations, Prof Mutambara said evaluation of the country’s minerals stock would help the Government build a knowledge base critical for informed negotiation to ensure mutually beneficial deals.

In this regard, he said no reference was made to the value of assets underground when the Government engaged Zimplats, Essar and DMC.

Government recently ordered a review of some of these transactions, but complications have arisen in some cases with Zimplats, for instance, contesting repossession of the excess platinum ground it holds.

Government is taking back about 27 879 hectares of platinum reserves from Zimplats, but the firm has contested this at the High Court.

Most foreign-owned companies have insisted that indigenous investors and State institutions should pay the value of equity reserved for locals in terms of requirements of the Indigenisation and Economic Empowerment Act. The law states that locals should own at least 51 percent of foreign companies as part of efforts to bring previously marginalised black Zimbabweans into the mainstream economy.

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