Today's edition of the Times of Zambia carried some interesting comments from the Mines Minister Maxwell Mwale, on the gemstone industry :
So Zambians are just lazy and have only themselves to blame. Naturally being the Government's mouth-piece the editorial picked up the theme :
Mines and Minerals Development Minister Maxwell Mwale said it was unfortunate that Zambian small-scale miners were busy blaming the Government for not doing enough to help them when mineral rights had been availed to them.
Mr Mwale was speaking in Kitwe on Wednesday when he visited Kagem Mining on his way to Solwezi. He said in an interview shortly after holding a meeting with Kagem and Gemifields chief executive officers Alok Sood and Ian Harebottle that the mere fact that the Government gave locals mineral rights was enough commitment on its part.
Mr Mwale regretted that some Zambians were selling the mines instead of using the mineral rights as equity contribution to develop the mines. He said failure of the emerald industry was caused by Zambians who failed to properly utilise the mineral rights. “The Government saw the need to empower locals hence the decision to give them mineral rights but unfortunately they (Zambians) are the ones who started selling these mines to foreigners,” Mr Mwale said.
The minister said in its efforts to further empower Zambians, the Government and the European Union (EU) came up with a credit facility scheme meant for small-scale miners to access funds for the development of the mines.
Fortunately, in his eagerness to maintain job security the Editor inadvertently made some interesting points, although he forgot the most important one : "Zambia has the world’s second largest emerald deposit after Colombia in South America and also boasts of Africa’s biggest amethyst and aquamarine fields but the proceeds do not reflect this status ", according to an earlier piece. That piece of information coupled with the editorial's inadvertent point that the price of gemstones has remained fairly sound during the global slowdown suggests that the issue is broader than simply enabling ordinary Zambians to have licences.
Precious stones are still fetching attractive prices on the international market despite the global financial crisis. Therefore, medium and small-scale entrepreneurs should scale up production of precious stones for the country to earn the much-needed revenue.
The Government on its part has offered incentives to medium and small-scale entrepreneurs in the mining sector for them to develop their mines in order to keep their operations afloat. Mines and Minerals Development Minister Maxwell Mwale has thus challenged medium and small-scale entrepreneurs to take advantage of incentives the Government has offered such as mineral rights whose process has been streamlined.
It is evident that some emerald mines in Lufwanyama and other parts of the country are lying idle while owners have continued to grumble about Government assistance when incentives are already in place. Some people have sold off the mines instead of developing them. The Government has streamlined the process of acquiring prospecting and mining licences. Zambians should take advantage of the streamlined process and engage in profitable precious stone mining in Lufwanyama on the Copperbelt, parts of Eastern, Southern Provinces and Mumbwa in Central Province.
The production of precious stones such as amethyst and emeralds could earn the country much needed revenue as it diversifies from mining copper whose prices have plummeted tremendously on the international market.
The Government has time and again advised Zambians to engage in precious stone mining, which had not been exploited to the full despite its lucrative nature. In Lufwanyama for instance, many mines have remained idle after owners acquired licences, while a vast area has not been exploited despite the Government streamlining the process of acquiring both prospecting and mining licences. In the past, some people had complained that bureaucracy marred the process but even after the Government streamlined the issuance of mining licences, there has not been any improvement.
In fact, there are reports that some Zambians are obtaining mining licences and giving them to foreigners to undertake operations at a fee. Such activities should be stopped immediately as they can retard development when the Government is in a hurry to empower the locals. We hope the Emeralds and Small-scale Miners Association of Zambia and other stakeholders in the sector will heed the minister’s advice and take advantage of the Government incentives.
The issue of licences is actually a misnomer, the larger problem is that this should be an industry that is properly regulated and possibly with a stronger element of state production. The logical conclusion becomes obvious once we recognise that Zambians current approach with licences is rational. Providing licences to Zambians will continue to lose government revenues because the incentives for ordinary Zambians to develop the mines is fairly weak. Simply put, its cheaper and more immediately rewarding for many Zambians to allow foreign production (by charging the "fee") rather than develop the mine themselves. To successfully develop these mines not only do you need credit, but also access to established supply chains. The foreign investor has all these things in abundance and crucially they are able to harness the economies of scale that are associated with pooling licences together. Bizarrely the more attractive gemstone becomes the more foreign investors push out the locals! Unfortunately for GRZ the foreign operators keep their cash abroad where they live!
Zambians are lazy alright, but their laziness is the failure to speak up and get government to stop being perpetually incompetent!