Zimbabwe passes new mining act as mineral production ramps up
Published: Tuesday, 12 June 2018
The approval of new mining legislation in Zimbabwe seeks to open the country up to greater levels of investment and boost its output of minerals, such as chrome and lithium.
Zimbabwe’s parliament has approved new
mining legislation and measures that reform controls
imposed under the ex-President Robert Mugabe, with the goal of
boosting production and wooing investors. The liberalizing
measures dovetail with declarations from new President Emmerson
Mnangagwa that the country – which has extensive
lithium and chrome deposits – is now open for
The changes, which have been welcomed by the mining sector
and opposition parties, have been in development since the
resignation of Mugabe last November. Mnangagwa has pushed to
secure the new mining laws ahead of a planned July 30 general
The old Mines and Minerals Act was outdated, having been
initially passed by the white minority-based Rhodesian regime
in 1961, amended under the Mugabe government in 1996 regarding
rules on special leases.
An attempt at comprehensive reform was first begun under Mugabe
– a bill being tabled in 2016 – but it
suggested increasing a range of controls, and changes agreed
since his fall from power have turned the law into a more
Gone, for instance are plans to demand annual regulatory
approval for any work undertaken by a mining company when
exploiting government-issued leases. The same applies to a
Mugabe-era proposal to require foreign mining companies to list
The new law also intends to establish a computerized cadastral
system to replace current manual mining title management.
For the first time, the law also recognizes small-scale miners
and gives them security of tenure, bringing them under
regulatory requirements to operate safely and with a view to
protecting the environment.
It also provides for a dispute resolution mechanism
regarding mining concessions and prohibits child labor in
The new law follows reforms approved in March to the
Mugabe-era Indigenisation and Economic Empowerment Act,
which aimed to increase
black Zimbabweans’ ownership of mines
by preventing foreign entities from having
majority shareholdings in the sector. The revised law
removed that requirement for mining operations for all
minerals, except diamond and platinum.
The president of the Chamber of Mines of Zimbabwe, Batirai
Manhando, said at his organization’s annual
general meeting in May that the chamber had worked with the new
government to reform the legislation.
"Renewed interest in the mining sector and the potential of a
strong recovery in mineral prices is cause for optimism. The
industry is poised to leverage on enhanced FDI [foreign direct
investment] inflows and firming prices to retool and grow
output," he said.
Manhando said in 2017, Zimbabwe’s mining industry
revenues had grown 8.5% year on year, largely driven by
significant output increases in chrome, gold, coal and
diamonds. He said total mineral revenues increased to $2.6
billion from $2.1 billion in 2016. He stressed that the mining
industry provides more than 40,000 formal jobs and work for
more than 200,000 artisanal and small-scale miners.
Mines and mining development minister Winston Chitando told
Industrial Minerals the government foresees growing Zimbabwe
mining output over the next five years. "This year, the mining
sector is poised for a major turnaround."
His government has been negotiating with Australia-based
Prospect Resources Ltd to exploit the Arcadia project lithium
deposit in Matabeleland - the company says it has more than 14
square kilometers of granted mining claims in "the largest code
compliant hard rock lithium deposit in Africa".
As for chrome, the Minerals Marketing Corp of Zimbabwe (MMCZ)
said in March this year that chrome ore production increased
92% year on year in 2017 to reach 122,010 tonnes, up from
63,394 tonnes in 2016.
Economics spokesman for the opposition party, the Movement for
Democratic Change, Eddie Cross told Industrial Minerals that
the appointment of Chitando, a former mining executive, after
Mnangagwa’s rise to power, as well as the new law
have started to give confidence to investors.
Noting that the old law was very outdated, he added that the
legal recognition of small-scale miners so that they can enjoy
legal title over their mineral rights, including security of
tenure is a significant development.
"At the same time the minister has carried the larger miners
with him and this Act is largely consensual in character. It
will lay the foundations for rapid expansion of the industry
and will provide a more secure operating environment," said
He, however, added that the new administration has yet to
satisfactorily address challenges at the Marange Diamond fields
where looting was rampant during the Mugabe era.
"Marange needs a top flight professional firm with the
requisite skills and capital to exploit the hard rock mining
that remains. Although the new government has recruited some
skills and experience – the institutional structure is
still not right," said Cross.
Chitando added: "This year the mining sector is poised for a
major turnaround. In the gold sector, we expect to get 30
tonnes up from 26 tonnes, diamonds output will reach three
million carats and we had already done one million
carats by the end of May. By 2023, we anticipate that we
will produce 11 million carats. Within five years, gold
[production should reach] 80 tonnes."