Local authorities lose revenue due to loopholes in mining law

Pamenus Tuso

Bubi—Local authorities are struggling to collect adequate revenue from mining operations in their respective districts, a senior official has said.

Both the Rural District Councils Act and the Mines and Minerals Act obligate mining investments to remit development and other levies to the relevant local authorities.

In an interview with NewsHub, the Bubi Rural District Council (RDC) chief executive, Patson Mlilo, said mining companies were not remitting development levies commensurate with their production because of loopholes in the laws.

Located in Matabeleland North, Bubi is endowed with vast gold deposits yet the district remains underdeveloped.

Some of the big mining companies which operate in the district include Turk Mine, Queens Mine, Lonely Mine, Wessels Sill and Pilgrim Gold Mine.

Mlilo blamed the Mines and Minerals Act for the low revenue collection.

“As a council, we charge mines development levies but the levies are not as much as we would expect. We charge them according to the number of employees a company has,” he said.

The Mines and Minerals Act determines the levy size in terms of the number of employees a company has.

“We would have loved that council development levies are charged according to output because now you find out that with very little labour, you get a lot because you are using machinery. Mechanization has rendered our levies very low,” said Mlilo.

Most mining companies, especially the Chinese-owned investments, were reluctant to undertake corporate social responsibility projects in the districts, he added.

He accused some of the mining firms of damaging road infrastructure.

“We have tried on several times to appeal to the mining companies to be socially responsible, but they have not been forthcoming. I think you have seen how bad the road that leads to this place is,” said Mlilo.

“Most of these miners are headquartered outside our district. So, they came here just to extract and take the gold either to Bulawayo or Harare where the beneficiaries are based.  We just remain with these shafts that you saw,” said Mlilo.

The current legislative framework was crafted in 1983.

A Mines and Minerals Amendment Bill proposes a raft of changes in the Act, which has become antiquated and out of touch with the new national and international mining developments.

Bulawayo-based natural resource governance expert, Effie Ncube, said the new Act should adequately address the issue of corporate responsibility so that local communities can fully benefit from their natural resources.

“As currently constituted, the Mines and Minerals Act is a huge disservice to local authorities because it deprives them of very important and crucial sources of income.

“There are many districts that should be prospering because of the huge number of mines that are located in those areas but because of the Act, there is very little or nothing that is going to the local fiscus, leading to deeper poverty and limited resources for local authorities.

“It is extremely important that the Mines and Minerals Act is amended to respond to the local needs so that whatever is taking place in those areas is able to feed into the local growth and create jobs and wealth for local communities,”said Ncube.

The Bill proposes to introduce a clause to the effect that for the miner to preserve its mining rights, it must within 30 days of registration, submit a work plan, an Environmental Impact Assessment report and a Social Responsibility Certificate.

“This is a welcome change as it includes the protection of the environment and how the social responsibility of the mining company will benefit the community and the economy at large,” said Ncube.

Mlilo expressed concern over the huge number of abandoned mines in the area.

Some of the mines which were abandoned are posing danger to livestock and human beings.

One of the mines in the area was abandoned by a Chinese outfit after reportedly failing to get enough gold deposits.

“Pertaining to those abandoned mines, we are equally worried because even if they were fenced, people will remove the fence and if the fences are removed they become a hazard to livestock and children.

“We are appealing to owners of these disused mines to follow correct procedures because most mines have their impact assessment reports which say that at the end of the mining, they should rehabilitate the land,” he said.

Mlilo said the local authority is currently engaging the Mines ministry as well as the Environmental Management Authority (EMA) with a view to find a lasting solution to the environmental damage caused by the miners.

“Some of the owners of these mines are still around and the issue can be rectified,” added Mlilo.