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Between a rock and hard place: Zim’s mining law amendments

Zimbabwe’s Mining Ministry is considering an amendment which could see prison sentences imposed on errant mining directors whose companies damage the environment.

The Government of Zimbabwe is considering an amendment to its 55-year-old Mines and Minerals Law in a bid to address several shortfalls in the sector. It also seeks to align mining laws with the country’s constitution which has strong environmental rights provisions.

According to Scanlen and Holderness – a LEX Africa partner in Zimbabwe – the proposed changes cover areas of mining information systems, environmental protection, funding arrangements and marketing of minerals.

Senior Partner at Scanlen and Holderness Sternford Moyo, says the Bill, if enacted into law, will modernise mining information management systems, through the introduction of the Cadastre System.

“Furthermore, it shall contain stronger environmental protection provisions. This will harmonise [Zimbabwe’s] mining legislation with our new constitution.”

Additional focus areas will include the localisation of the shareholding of mining companies, localization of funding arrangements and prohibition of  export of unprocessed minerals.

Moyo says, unfortunately, there are areas of concern relating to the bill.

He says the legislation will not make it easier to leverage mineral resources in order to raise much needed funding for the sector. He adds that the transferability and mortgage-ability of mineral rights remains problematic in Zimbabwe.

Moyo says there is concern over the ‘liability of directors’ clause which could see directors of mining companies jailed, if it is found that they have harmed the environment with their operation. Moyo says this is not supportable and may frighten investors. He adds that the localisation of funding arrangements, in a country suffering from an acute liquidity crisis, does not make any sense.

“Too much power has been concentrated in the hands of the Minister and the Ministry of Mines. The concept of strategic minerals focuses on preservation of minerals instead of creating provisions for sustainable benefits. Minerals should be extracted. What should be preserved, are benefits.”

LEX Africa Zimbabwean member is Scanlen & Holderness 

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