EDM long-defunct LONELY GOLD MINE in BULAWAYOThe ASX-listed firm...

EDM long-defunct LONELY GOLD MINE in BULAWAYO

The ASX-listed firm is, however, yet to indicate how it will comply with the country's indigenisation programme, which entails that at least 51 percent of foreign companies' equity should be in the hands of locals.


Zimbabwe’s New Controversial Mining Legislation a Boon to Indigenous Communities


HARARE, Zimbabwe -- The enactment of a new legislation by the Zimbabwe government that seeks to empower local communities get some stakes in the mining industry has drawn mixed reaction within the foreign based mining companies and human rights groups.



By Shadrack Kavilu for Gáldu

Within the foreign based mining companies the new law is seen as controversial while in the human rights and local communities perspective the law is viewed as the panacea to ending poverty within the indigenous people who have been displaced from their ancestral land to pave way for mining.


The indigenisation law announced recently by President Robert Mugabe and Prime Minister Morgan Tsvangirai seeks to ensure 51 percent of shares in every public or any other business are owned by indigenous Zimbabweans.

Photo: Local communities in Zimbabwe collect diamond deposits from river shores. Credit: Shadrack Kavilu.

The regulation grants the government rights to own 100 percent ownership for all alluvial diamond mines and 51 percent stake in all other mining projects in the country which includes minerals such as non-alluvial diamonds, platinum and gold.

According to statements published in the state- controlled newspaper the Herald, Zimbabwe’s minister for Indigenisation and Empowerment, savior Kasukuwere said under the new legislation Indigenous communities would be entitled to receive 10 percent of gross profit from the mining of mineral resources.

“This is the position of government and those companies will be sitting down with us to discuss it, but the broad principle is that the alluvial diamonds belong to the state and they must benefit the people of Zimbabwe,” Kasukuwere said in a statement published in the Herald newspaper.

The law to be published within this month of February proposes the creation of an empowerment fund that will provide financial assistance to indigenous Zimbabweans seeking to acquire shareholding in companies.

“Work is at an advanced stage to finalize consultations on the mining sector with a view to publishing the gazette for the sector not later than the end of February 2011,” said Kasukuwere.

The funds the minister says would be used for implementing community projects such as provision of education, infrastructure and healthcare.


Photo: Indigenous people at an alluvial diamond mine in Zimbabwe. Credit: Shadrack Kavilu.


The move has been lauded by human rights groups who see it as a step towards empowering the local communities who have remained poor despite the extraction of rich mineral resources from their ancestral lands.

Economical analyst, however describes the move as dangerous and that it could lead to capital flight of foreign based mining companies.

The law describes an indigenous Zimbabwean as a person who was disadvantaged by “unfair discrimination on the grounds of his or her race” before the country’s independence from Britain.

The majority blacks were disadvantaged by previous white-led governments until Zimbabwe’s 1980 independence. Despite Mugabe’s seizure of white owned land, majority of Zimbabwe’s communities remain squatters in their own country.

The Indigenization and Economic Empowerment Act (IEEA) was first conceptualized in Zimbabwe in 2007. Under the law Zimbabweans are entitled to own 51 percent in all foreign-owned companies.

The government introduced the law as part of a plan to correct past land injustices that have left indigenous people landless.

The legislation targets foreign-owned mining companies that operate in Zimbabwe which are valued at more than $500,000. These companies would be required to shed off 51 percent of their shares to Black Zimbabweans indigenous to the country by the year 2015.

Zimbabwe has rich deposits of diamond that are yet to be fully exploited and exported, but its poor human rights record has seen the country suspended in a number of occasion by international diamond regulatory institutions.

The Marange diamond fields in the eastern part of the country, is one of the diamond mines that has gained notoriety as a major site of reported diamond smuggling and human rights violations.

Photo: Communities working at a diamond field in Zimbabwe. Credit: Shadrack Kavilu.

The fields were reported by Human Rights Watch to be a culprit of forced labour of both adults and children that included beating and torturing local villagers. Trade from the area was suspended until recently when it was lifted by the international body.

The Kimberley Process was created to end illegal trade in diamonds such as blood diamonds that are used to fund conflict and war especially in Africa.

The Kimberley process set up an international system for the export and import of diamonds.

Zimbabwe has had troubles selling the Marange field diamonds because of the ban from Kimberley Process that bars its members from dealing with diamonds extracted through abuse of human rights.

However, the country’s, Indigenization and Empowerment minister, Savior Kasukuwere was recently quoted by the state-controlled newspaper saying that the cabinet had resolved that alluvial diamond mining in Marange fields would commence.

In recent past, Zimbabwe has carried out reforms in its mining sector in view of attracting foreign investments, however the new legislation that requires foreign based mining companies to shed off some shares has been widely criticized.




Updated 03.02.2011
Published by: Magne Ove Varsi