Zimbabwe Mining Regulation
Mining contributes considerably to the Zimbabwean economy and currently comprises five percent of Zimbabwe’s gross domestic product, 4.5 per cent of its employment and 60 per cent of its export earnings. A substantial portion of Zimbabwe’s land surface is comprised of prospective ground that hosts a variety of mineral resources, including gold, platinum group metals, base metals and industrial minerals. The country has the second largest deposits of platinum and significant deposits of diamonds. Despite the huge mineral endowment, exploitation both upstream and downstream has been limited.
Principal Legislation and Regulator
The primary legislation is the Mines and Minerals Act 1961 (Chapter 21:05, “MMA”), which is a consolidation of all laws relating to mines and minerals. The Mining (General) Regulations 1977 (“Regulation”) also plays an important part in regulating the mining sector. The objective of both the MMA and Regulation are to provide for the development of mineral resources consistent with sound economic, environmental and land use management. The MMA provides that the rights and ownership to all minerals under the soil vests in the President of Zimbabwe (s. 2, MMA). All state land and private land with mineral rights reserved is open to acquisition under the MMA (s. 26).
A variety of various bodies play a role in administering mining matters within Zimbabwe. Prospecting licenses are issued by the Mining Commissioner, while mining leases are approved by the Mining Affairs Board (“Board”). The Board consists of 11 appointees, four of whom are nominated by the Chamber of Mines of Zimbabwe, whilst two others are also lay members from the farming and accounting sectors (s. 7, MMA). Special grants under Part XIX of the MMA are issued by the Secretary for Mines and Mining Development (ss. 142 and 291, MMA). Exclusive prospecting licences, special mining licences and special grants under Part XX of the MMA are approved by the President of Zimbabwe (ss. 90, 162 and 301, MMA).
Grants and Forms and Mineral Title
In Zimbabwe, any person over the age of 18 years and who is a Zimbabwean resident may apply to the mining commissioner for a prospecting licence (“PL”). A PL entitles the holder to search for any minerals, mineral oils and natural gases on land open to prospecting and also to peg/register claims (s. 27(1) MMA). A PL is approved by the Commissioner for a period of 2 years (s. 23, MMA). Only the holder of a PL (or an approved prospector appointed by the holder) can conduct prospecting activities. Mining titles granted and administered under the MMA include the following:
Exclusive Prospecting Licence (“EPL”) – an EPL is open to any person and provides the holder with the exclusive right to prospect for specific minerals in any defined area in Zimbabwe. An EPL is approved by the President for a period not exceeding 3 years and may be extended by the Minister for a period not exceeding a further 3 years (s. 94, MMA). EPLs cannot be transferred or ceded without the written permission of the Minister, which must be done in accordance with s. 92(2) of the MMA and will only be considered in special circumstances (s. 90(1)-(2), MMA).
Mining Lease (“ML”) - a ML is open to any person holding a registered mining location/s and it gives the holder exclusive right of mining any ore or deposit of any mineral mentioned in s. 135(a)(2) of the MMA, which occurs within the vertical limits of the area covered by the ML(s. 135(1), 150(1)(a)-(b) MMA). Once a ML is issued, the holder is subject to perpetual annual renewal, where the holder can continuously work under the lease from the date of issue so long as payment of the prescribed fee is made to the Mining Commissioner (s. 218(3) MMA). MLs can be transferred with the approval of the Board in consultation with the owner of the land covered by the ML (ss. 148(1)-(3) MMA).
Special Mining Lease (“SML”) - SMLs may be obtained where the investment will be wholly or mainly in foreign currency and will exceed US$100 million in value and the mine's output is intended principally for export (s. 159(1) MMA). Most foreign investors will be seeking, ultimately, the award of an SML. An SML can be issued for a period not exceeding 25 years, but the Minister may make provision for its renewal with the President’s approval for periods not exceeding 10 years (s. 164(4) MMA). SMLs can be transferred with the approval of the Board in consultation with the owner of the land covered by the SML (s. 165 MMA).
It should be noted that Special Grants are also available in respect of those seeking to mine coal, mineral oils, natural gases and nuclear energy material (Part XX MMA).
Before a miner may begin mining operations, an environmental impact assessment must be completed (“EIA”) (s. 97, Environmental Management Act 2002 (Chapter 20:27) (“EMA Act”). Schedule 1 list all activities that require an EIA, which expressly includes mining, quarrying, mineral prospecting, ore processing and concentrating (s. 7, Schedule 1, EMA Act). The first step in an EIA is to pre-clear the scope of work to be completed through the filing of a “prospectus”. The EIA report should include a detailed description of the project, likely impacts and mitigating measures (s. 99 EMA). The DG will then consider the report within sixty days and notify the miner of their decision. Upon approval in terms of s. 100 of EMA Act, the miner is issued with an EIA certificate.
It is also important to note that any developer must now comply with local indigenous ownership requirements - a minimum of 26 per cent of mining companies must be owned by indigenous people with a further 25 per cent acquired by the state on a 'free carry' basis (s. 3 IEEA). The Mineral Marketing Corporation regulates the marketing of minerals (with the exception of gold). Sales must be made to the corporation or under their authority or in terms of a contract negotiated by the corporation on behalf of the seller. The MMCZ charges a commission on such mineral sales (0.875 per cent).
See Zimbabwe Environment Regulation.