Zimbabwe ‘one of worst mining jurisdictions’ - Zimbabwe Situation

Zimbabwe ‘one of worst mining jurisdictions’

via Zimbabwe ‘one of worst mining jurisdictions’ – IOL.co.za March 7 2014 by Tawanda Karombo

Global mining investors fear and loathe Zimbabwe because of inherent uncertainties regarding its “environmental regulations, the legal system and taxation regime”, as well as trade barriers and the poor quality of its geological survey, a new survey shows.

Zimbabwe has the largest platinum reserves after South Africa and boasts vast deposits of other metals and minerals, including gold, nickel, diamonds, coal and chrome.

Mining companies in the country are, however, battling for the restoration of certainty in the operating framework and want the government to fix issues such as high royalty rates on mineral sales.

This week Canadian think tank the Fraser Institute ranked Zimbabwe among the five worst jurisdictions for mining investments.

Zimbabwe has put platinum mining companies under pressure to set up a smelter and says it has shortlisted two unnamed firms to build the refinery, which could cost as much as $3 billion (R32bn).

Zimbabwe’s poor ranking comes hardly a week after the government shot down the Chamber of Mines of Zimbabwe’s presentations and calls for a gradual increase in enhancing mineral beneficiation.

Minister of Mines and Mining Development Walter Chidakwa said last week that the need for a refinery was no longer debatable and maintained that a 15 percent levy on raw platinum exports would remain in place, at least for now.

Alana Wilson, a senior economist at the Fraser Institute, said: “Zimbabwe’s lowest scores on the Survey of Mining Companies 2013 were for uncertainty concerning environmental regulations, the legal system, the taxation regime and disputed land claims, as well as infrastructure, trade barriers, and the quality of the geological survey. For each of these factors, no respondents rated that these factors ‘encouraged investment’.”

He said mining was a “long-term and risky endeavour and mining companies must be confident in the stability and predictability of the regulatory regime” to invest.

“In order to enhance the country’s attractiveness, Zimbabwe must provide stable, transparent, and predictable regulations and a legal system that is regarded as fair, transparent, non-corrupt, timely and efficient,” Wilson said.

About 30 percent of respondents surveyed by the Fraser Institute identified Zimbabwe’s legal system “as a strong deterrent to investment”, while trade barriers were also rated by 30 percent of respondents as a strong deterrent.

Major South African mining firms such as Impala Platinum, Aquarius Platinum, Anglo American Platinum and Metallon Gold are maintaining their investments in Zimbabwe. However, any prospects the country has of attracting more mining sector investors are waning owing to growing investor scepticism over the certainty and safety of investments.

 

COMMENTS

WORDPRESS: 4
  • comment-avatar
    Nyoni 4 years

    Not surprising. This inflexibility by the regime is deliberate.they know that they need FDI but at their corrupt terms . Again I say “WHO AMONGST HONEST MEN WILL DEAL WITH A CROOK”. I as sure as hell would not.

  • comment-avatar
    Ndebvu Mukomichi 4 years

    Self-Righteous Assessment by Bogus Investors!

    They can stay where they are- Zim is only interested in serious investor who respect the motherland and its laws. We have the natural resources and the right investors are here with us. We are happy where we are, who we are and what we are becoming- a leader nation of Africa!

    Gone are the days when Africans ‘rasa chiri muhapwa vachiombera chavasingaziye’ – in effect like a dog throwing away the steak in its mouth in order to take the bigger piece held by its own reflection in the water. We are much wiser now!

  • comment-avatar
    Canuck 4 years

    Ndebvu, you are blowing smoke and have no idea what you are talking about……..as an international investor, I can tell you that there will be ZERO flow into Zim mining companies pretty soon…….and if you think the Chinese will be keen you are wrong again…….they will be even tougher than the West when it comes to terms….

  • comment-avatar
    Jono Austin 4 years

    No sane investor (international or local) will invest in Zimbabwe. You are dealing with thieves, thugs and murderers when you deal with Zanupf. There is no honour with this regime-look at how they have destroyed Zimbabwe. They are a blight on Zimbabwe. However Mugabe will be dead soon which will mean the end of Zanupf and then perhaps sanity will prevail and Zimbabwe can start the rebuilding process.