By Tatenda Chitagu

MASVINGO – Zimbabwe could be prejudiced of hundreds of millions, if not billions of its much-needed foreign currency in mining deals with foreign investors as the deals will be negotiated on guesstimates due to the country’s lack of economic intelligence and machinery to determine its mineral deposits.

The Southern African country, targeting a US$12 billion mining economy by end of 2023, is endowed with vast mineral resources ranging from lithium, platinum group of metals, chrome, iron, coal and tantalite, among others.

These resources have, however, not translated into wealth for the nation, which is characterized by high inflation and decaying infrastructure.

According to Veritas, a legal think-tank, between 2000 and 2020, Zimbabwe is estimated to have lost over US$32 billion through illicit financial flows, with the mining sector contributing the greater chunk of the leaks due to trade misinvoicing, mispricing and smuggling.

This comes at a time when the southern African country’s hospitals have no drugs and lack ambulances, while approximately 1.5 million people living in urban areas are food insecure, according to a 2023 Urban Livelihoods Assessment Report by the Zimbabwe Vulnerability Assessment Committee (ZIMVAC), a consortium of government, development partners, the United Nations, Non-governmental organisations, technical agencies, and the academia.

High level sources in the Ministry of Mines and Mining Development blamed this on ignorance over what lies beneath Zimbabwe’ surface and poor economic intelligence related to mineral performances on world markets.

“We have a colonial geological map which we are using but slightly updated. Most of the mining data was lost during the transition from Rhodesia to Zimbabwe,” an official in the Ministry said, preferring anonymity due to protocol issues.

Another source added that due to lack of skilled manpower and financial resources, government does not carry out feasibility studies and abdicates that to foreign engineering companies that specialise in construction of mines. This resulted in mines being sold for a song, prejudicing Zimbabwe of millions of dollars.

“Government geologists do not carry out a feasibility study on a private project if a mine is being acquired by another investor. These studies are very expensive and can cost as much as US$15m.

“The failure to acquire exploration machinery is due to the consumerist frenzy in government where all that is coming from mining is spent on luxurious living by the ruling elites.

“Most of the big companies are now in the habit of subcontracting companies because of their incapacitation,” the source said.

Mines and Mining Development Minister Winston Chitando could neither confirm nor deny the absence of a current and comprehensive geological map as he did not respond to questions sent to him, despite initially promising to do so. He did not answer his phone in our repeated follow-up efforts.

However, details that the southern African nation may get the shorter end of the stick in mining deals were revealed in in 2014 when government admitted that crucial minerals exploration findings are stuck in the hands of foreigners after an unnamed Canadian firm it contracted to conduct aeromagnetic surveys left ‘in a huff’ without handing over the results. It is alleged that the government had failed to pay for the surveys.

Then Deputy Mines Minister Fred Moyo further told Parliament during a question-and-answer segment that another comprehensive geological survey is, in unclear circumstances, in the possession of a South African University and parts of it are allegedly being sold to individuals and companies who then come to Zimbabwe to mine, armed with that strategic geophysical information which the state does not have.

“I can confirm that there are two cases where a Canadian company was hired by the Government to do exploration work covering the entire spectrum of our mineral portfolio. I also confirm that we are unable to access the results that emanated from that exercise for various reasons.

“I frankly have not been able to see the contract that we signed with the Canadian company. I know that the Canadian company left the country in a bit of a huff for reasons that I am not sure about, whether they were either (sic) political or economic. We are not getting responses from them, and we are simply not able to get the information sent back to us.

“There is also work that was done by other oil companies whose results were given to us but without a full analysis. We are trying to analyse those results so that we can confirm what that work, in fact, has indicated with regard to mineral endowment,” Moyo told state-controlled Sunday Mail newspaper then.

Center for Natural Resource Governance (CNRG) director Farai Maguwu said the government is shooting in the dark as some companies may come in the guise of prospecting, yet they will in actual fact be mining secretly.

“The consequence of this is that investors come to Zimbabwe with more information than the government itself. Hence a significant number of companies have been mining under the guise of exploration as was the case of De Beers (Kimberlitic Searches) in Marange from 1993 to 2006.

“The government needs to sort this out by financing a proper aeromagnetic survey with active participation of our citizens. In the absence of that data government should auction the unmined minerals. Auctioning will force investors to declare the real value of our unmined assets. This will also mean a tweak to the Minerals Marketing Act (MMA) of 1961, adding a provision that even if a company carries out exploration it will still have to bid for the mineral with others,” Maguwu said.

The Mines Ministry’s mission, according to the official government of Zimbabwe web portal is ‘to promote sustainable exploration, mining, processing, marketing and management of mineral resources for the benefit of all Zimbabweans’. The portal lists the overall functions of the Ministry as to ‘formulate mining development policies, monitor and evaluate the implementation of mining policies, maintain an up to date database of exploration and mining titles in Zimbabwe, design mechanisms geared at effective accounting for the country’s mineral resources, administer and review mining laws, promote beneficiation and value addition of mineral resources,’ among others.

But the Ministry is far from being closer to implementing its mandate and fulfilling its mission if the revelations are to go by. Its website has been down for weeks. By Friday, July 28, an attempt to open it proved futile as the site says it is ‘down for maintenance.’

According to the chairperson of the Zimbabwe Anti-Corruption Commission, a body tasked with fighting graft in the country, in 2019 alone, Zimbabwe lost an estimated US$3 billion to illicit financial flows, a figure which could equip thousands of hospitals in the country with ambulances.

Late former president Robert Mugabe once remarked in 2016 that the country had lost US$15 billion in income from diamonds from Chiadzwa Mines near the eastern city of Mutare,due to corruption and foreign exploitation.

He however retracted his remarks two years latter amid investigations by the national assembly.

*This story was produced by Tatenda Chitagu. It was written as part of Wealth of Nations, a media skills development programme run by the Thomson Reuters Foundation. More information at http://www.wealth-of-nations.org. The content is the sole responsibility of the author and the publisher.