Professor Francis P. Gudyanga, Permanent Secretary, Ministry of Mines and Mining Development, Republic of Zimbabwe

Recent restructuring will increase ministry’s efficacy in dealing with regional issues.

Prof_Francis_P-BLOGThe Zimbabwean Ministry of Mines and Mining Development has recently been restructured. Can you give us an overview of the main changes in the governing model?

Professor Francis P. Gudyanga (FPG): Over the last two years, Zimbabwe has restructured its Ministry of Mines and Mining Development. We now have five mining districts and provincial offices with the mining director at the head of each office. While Zimbabwe has ten provinces, there will be eight provincial mining offices, as the metropolitan province of Harare and Bulawayo are attached to the other rural provinces. Harare will be part of the Mashonaland East province and Bulawayo will be part of the Matabeleland North province. The offices are going to be headed by technical employees so as to increase the efficacy with which mining issues are dealt with. The restructuring came into effect in July 2014 as we have recognize that Zimbabwe has mining activities throughout the country and restructuring will increase the presence and efficiency of the ministry in the rest of the country. The restructuring is also to ensure that we assist the small-scale miners as we felt that we were not available to this large sector of the industry and wanted to rectify that.

Recently there has been much press regarding diminishing diamonds reserves in Zimbabwe. Is there any truth to these claims and what would you as the ministry like to say to investors on this topic?

FPG: There is no basis to believe that the diamonds are diminishing. Assumptions come from the investors that have only been given certain areas to mine, but the investors had wanted additional areas. As a ministry we wanted investors to focus more on the exploration of conglomorates and kimberlites and less on the alluvial diamonds, which have been easily mined thus far. Zimbabwe is now consolidating the diamond industry. When diamond mining started, we had seven mining companies in a small area like Marange. From now on, we want no more than two companies in such a small area thus we are putting together a holding company called the Zimbabwean Diamond Industry and all the areas will be subsidiaries of this holding company. The ministry is integrating the existing companies in steps with the Marange provincial office, which will be completed within the next two three months.

In 2013 the ministry was hoping for increased beneficiation of metals and minerals in Zimbabwe and there were talks of the first platinum refinery to be built in Zimbabwe. Can you tell us how these plans have progressed?

FPG: Since 2013 the ministry has invited expression of interest in the construction of a platinum refinery, and two companies have been shortlisted. We have done the due diligence on one of these companies and are still in process of reviewing the second. Once we have concluded our findings, we will invite the winning bid to communicate about how they can go about building a refinery for the platinum. The next stage is then to decide what Zimbabwe will do with the platinum. In terms of value addition in the diamond sector, the ministry has also reviewed the licenses for cutting and polishing of diamonds to encourage small scale or big scale cutting and polishing in the country. The goal is development of the jewelry industry both in diamonds and platinum.

Has there been more attention on Zimbabwe as an investment destination since the EU sanctions on diamonds have been lifted?

FPG: The European sanctions have been lifted, which has helped Zimbabwe, but there remain some prejudice assumptions. The international banks that assist Zimbabwe in transactions have been scrutinized and are sometimes penalized by the Office of Foreign Assets Control. This is because of other sanctions that have been imposed, especially by the United States. When Zimbabwe does an international transaction it is a hassle to get the money in and out of the country. As of 10 July 2014, the sanctions were reviewed and declared still to be effective. Zimbabwe is trying to use other currencies, but it is difficult to avoid the US dollar. The ministry has been working with partners to influence the US government on those sanctions and have them lifted.

Are there any other major policy changes that we can expect to see in 2015?

FPG: The ministry is coming up with an amendment of the Mines and Minerals Act, which will emphasize value addition inside the country. The Ministry is also reviewing the environmental aspects to ensure that there is rehabilitation of mining areas by the companies that come in to do the mining. Another policy that we are going to look at more closely is our “use it or lose it” policy. Companies must work on their resource claims or they will lose it. The ministry is also focusing on helping the small-scale miners by loaning them equipment and maintaining it. Small-scale mining will contribute about 20% to the gold sector when properly incentivized.

This interview was conducted by GBR for its Mining in Africa Country Investment Guide (MACIG) 2015, which was published in February 2015 and can be viewed here. To participate with your comments, please contact Sharon Saylor at ssaylor@gbreports.com.

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