MACIG Connect Series
The President of Zambia’s Small Scale Miners Association explains the efforts to help more Zambians benefit from the mining industry.
Can you explain SSMAZ’s role in the Zambian mining sector and highlight its priorities for the sector?
Education, training, demonstration and monitoring are the key elements of any program for artisanal and small-scale mining (ASM) in Zambia and improving occupational safety and health in ASM. Fair-trade initiatives for giving small-scale producers in developing countries the opportunity to trade their products under better selling terms and conditions should be developed wherever possible. Encouragement and support for the formation of cooperatives, associations or enterprises to support communication, cooperation and coordination between miners should also be provided as opportunities for networking between miners to share information and coordinate activities are often productive.
From the small-scale miner’s perspective, what is the greatest challenge facing the Zambian mining sector?
Zambia is rich in minerals — gold, cobalt, copper and emeralds — but we have not fully managed to convert that wealth for the benefit of the people of Zambia. We need to know where to improve and what changes to make so we can harness this wealth to benefit not only current, but also future generations of Zambians. These positive aspects are overshadowed by a lack of transparency and accountability regarding revenue management, a lack of consistency surrounding fiscal policy, and lack of support for diversifying the economy and leveraging of infrastructure for the general population. Key stakeholders noted the need for the mining industry to more effectively use local products and services, but currently there is no national supplier development policy for the industry. Consequently, 95% of goods and services used by the mining industry are imported.
There are also concerns about social and environmental issues surrounding the mining sector. Zambia’s regulations in this area are a good starting point, but regulatory and monitoring agencies must be strengthened to conduct more meaningful consultation among stakeholders on issues affecting the sector. Worldwide there is the perception that mining companies invade local territories and leave gaping holes once they have extracted mineral resources. In this regard, we see the interaction of mining companies with the communities in which they are hosted as opportunities for sustainable partnership built on providing education and thus potential for quality employment, local business development as well as citizens ownership of the mining companies.
What are the opportunities for cooperation between small-scale miners and large-scale producers?
Large-Scale Mining (LSM) companies increasingly come across Artisanal and Small-scale Mining (ASM) workers during their exploration or production activities in the developing world. The ASM-LSM relationship is often conflictual because both types of miners compete for the same resource or because they perceive each other as a threat. Hence we have seen an increase in situations where LSM are now shorting ASM to protect the minerals. However, the ASM-LSM relationship is now also undergoing a largely positive evolution in some part due to new Corporate Social Responsibility (CSR) commitments. In some places, “Mining Together” has become more than a dream. The Communities and Small-scale Mining (CASM) initiative wishes to contribute to the sharing of knowledge and solutions related to ASM-LSM issues. CASM has partnered with two key resources in the field of community development and mining: the World Bank / International Finance Corporation Oil, Gas and Mining Sustainable Community Development Fund, and the ASM working group of the International Council on Metals and Mining, though this program is yet to be introduced to Zambia. This guide is the result of this collaboration and provides an informative overview of the experiences of the most typical ASM-LSM issues and guidance for appropriate interventions.
In terms of value addition, what opportunities are there for Zambians to extract more from their resources and what needs to be done to promote the industry’s capacity to develop these initiatives?
In terms of value addition, the International Council on Mining and Metals estimates that procurement of imported goods is almost entirely made through Zambian companies, but only 5% of industry goods procured for the purpose of mining are locally manufactured. In an effort to promote business relationships with local suppliers, mines have created programs and employed imported staff to assist businesses in tendering, marketing, or developing technical capacities, among others. For example, Kanshansi offers a development program in which it trains emerging contractors, offers business development workshops for SMEs, and continually explores possibilities for local manufacturing, but this is reducing because labor is been imported from outside.
The government has also instituted some local content regulations according to the MMDA of 2015, whereby a mining company has to give preference to materials and products made in Zambia, as well as Zambian contractors, suppliers, and service agencies. While this is difficult to enforce, the mines adhere to this stipulation not only because it is the law, but also because it is cheaper and more convenient for them to deal with local companies if they are available. The legislation also specifies preferential employment to citizens and the implementation of training programs in technical and managerial skills for Zambians. In some cases, backward flow such as production of mill balls for the Kansanshi mine in Solwezi and other mines in the Copperbelt has not been supported by the mines through their local development programs. Several services and organizations from outside the government and the mines have also created local content programs to work with local businesses, including the Zambian Mining Local Content Initiative, or the Private Enterprise Programme, Zambia. While these initiatives have been successful, their effects are only slowly influencing local business development. Such initiatives by the mining sector and other agencies should be coordinated and integrated into broader national development plans to stimulate the local economy and support the growth of local businesses.
What final message would you send to international readers and local players about the future of the Zambian mining sector as a whole and the role of small-scale miners?
By investing in its population, the state will have more skilled professionals both to create local businesses as well as an easily accessible workforce for companies entering Zambia. Additionally, the government has to ensure that all policies and regulations are coordinated to support local content, SMEs, and public private partnerships. In terms of the tax regime, stability and predictability, more incentives, as well as more transparency are fundamental. Zambia remains a perfect case study for natural resource governance due to both its long tradition of mining and its experience in nationalization and privatization. It is, furthermore, a politically stable and peaceful state, despite the rampant poverty and vulnerability issues. Expected GDP growth is 3.9% in 2017 and 4.6% in 2018, and underpinning this growth is improved production in agriculture, energy and mineral production, although mining will still be a large part of our economy in years to come. The anticipated IMF bail-out is expected to have positives such as increased liquidity in the market, help reduce government borrowing in the market and crowding out private sector, and also add an additional layer of oversight from IMF on government to adhere to agreed fiscal discipline.