via Mines minister predicts growth against the odds | The Zimbabwean by Farai Mabeza 08.01.14
Under-pressure mines and mining development minister Walter Chidhakwa has insisted the mining sector will finally come good in 2014 after being in the doldrums for years.
Analysts, government ministers, captains of industry and civil society have all challenged the minister to deal with corruption and remittance of revenue to government, among other problems.
Chidhakwa last year revealed that he was offered bribes soon after his appointment to the ministry, but has not disclosed details.
“The issue of corruption is not something we can ever say we have dealt with completely. It’s important to recognise that there is corruption in the system. We must make the system watertight to minimise instances of corruption,” he told The Zimbabwean in an interview. “In all honesty, we can’t say we can eradicate corruption.”
The Zimbabwe National Chamber of Commerce president, Hlanganiso Matangaidze, recently told The Zimbabwean that the mining sector would have to step up to the plate in 2014. He lamented the fact that Zimbabwean diamonds were creating jobs in other countries when the local employment sector was in dire straits. “You don’t go through a day without realising the need to create jobs in the country,” he said.
Some commentators have said that Zimbabwe has the potential to generate more than $8bn and create more than 200,000 jobs annually if the government introduces mineral beneficiation.
Chidhakwa however had high hopes for mining, saying that the sector was poised for growth this year. He said the slashing of mining fees would help steer this growth. “We are also addressing inconsistencies between regulations and investment promotion,” he said.
While indigenisation requirements look set to be relaxed in some sectors, President Robert Mugabe has maintained that the mining sector should fulfill the 51 per cent quota for local ownership.
Finance minister Patrick Chinamasa, just like his predecessor, Tendai Biti, has said that he is still to receive revenue from diamond mining companies in Marange.
Chidhakwa said he did not know why the companies had not remitted funds in the past, but stressed that revenues would grow this year.
“We are putting in place systems that ensure that companies pay their contributions on the 50 per cent basis that the government owns in these firms,” he said. Chidhakwa said he also expected new players to come into the industry this year.
“We expect new companies to start operations. I expect the diamond sector to grow. Gold will be dependent on what happens to the international price,” he said.
Concerns have also been raised that alluvial diamonds are on the verge of running out and the mines ministry recently said it would dispatch its own experts to verify these claims.
Chidhakwa said that reliability of power supply would also be a determining factor in mining production. Mines have experienced serious disruptions in production due to recurrent power cuts.
An international non-governmental organisation, Global Witness, reported that Zimbabwe had lost around $2bn in unaccounted diamond revenue since 2008. According to a report by the parliamentary portfolio committee on mines and energy in the previous parliament, former mines minister Obert Mpofu conceded that globally, the diamond industry was run like a mafia, with very few “clean” individuals.