HomeOpinion & AnalysisIndigenisation’s ‘unintended consequences’ in Zim’s mining sector

Indigenisation’s ‘unintended consequences’ in Zim’s mining sector

By Obey Manayiti and Sophie Cullis

The current state of affairs in Zimbabwe’s mining sector can aptly be attributed to the law of unintended consequences.

The law of unintended consequences has been defined by Robert Norton, a columnist and formerly an editor of Fortune magazine, as the “actions of people – and especially of government”, which “always have effects that are unanticipated or unintended.”

These effects or consequences can be positive or negative; however, the underlying reality is that they were not part of the primary or original goal.

In theory and optimistically, the Indigenisation and Economic Empowerment Act was meant to provide autonomy to its citizens by giving them more control over the economy.

It was a well-intentioned act, but due to its negative unintended consequences, it brood disaster.

As mentioned in our submission last Sunday, as a consequence of the Indigenization Act, companies were supposed to significantly reorganise their shareholding structures and ensure that a majority is redistributed to the locals.

However, the law of unintended consequences kicked in and conceived a tenuous investing environment within Zimbabwe’s mining sector.

The ideology behind the Act was embraced, to a large extent, with a view of taking over existing investments.

Indigenous Zimbabweans were encouraged to take over mining fields, either as individuals or small consortiums.

This instigated capital flight, followed by people moving into and operating disused mines, many of which had not been rehabilitated.

In Zimbabwe, an estimated 67% of the total population lives below the poverty level; this, coupled with high unemployment, has pushed the scavenging for minerals to exponential levels.

Unregulated artisanal mining has resulted in a number of problems that were not intended when the government implemented the Indigenisation legislation, especially within the gold mining sector.

Firstly, the ownership of these mining sites is contested amongst the miners, with violent gangs having emerged to control mining activities on both abandoned mines and new sites.

There is a direct relationship between the exponential rise of artisanal mining across Zimbabwe and these abandoned mines.

In fact, it is estimated that one in thirty Zimbabweans (14% of the labour force) engages in artisanal mining.

Figures even suggest that sometimes small scale and artisanal miners produce more gold than large-scale mining companies.

Nevertheless, violent syndicates, buoyed by the ethos of the Indigenisation Act doctrine, often exploit artisanal mining opportunities, lawfully or otherwise, under the guise of empowerment.

In 2019, both the police and military forces intervened and launched a large-scale operation against these gangs, yet, they always resurface.  Increasingly, a number of these gangs have been linked to the ruling Zanu PF party.

In a report published by Maverick Citizen in February 2021, where the extend of Zimbabwe’s corruption was detailed extensively; it alleged that President Emmerson Mnangagwa controls violent gangs of miners due to his vested interest in artisanal mining.

Thus, it appears that the mining sector within Zimbabwe has become intrinsically bound to its politics.

Before the commencement of mining operations, the law required that parties draw up an Environmental Impact Assessment (EIA) plan.

Yet, as discussed in the next instalment, the environment in Zimbabwe continues to suffer as a consequence of mining operations.

Accordingly, it can be inferred that these EIAs are not being implemented as extensively and rigidly as they ought to be.

All this can be traced to the law of unintended consequences.

Once thriving gold mining companies in Zimbabwe have ceased operations for many reasons, among them, the hostile operational environment. According to Centre for Natural Resources Governance report titled From Blood Diamonds to Bloody Gold published last year, “Doing business in Zimbabwe is extremely challenging owing to policy inconsistencies, high government interference in the banking and financial sector, rent-seeking behaviour by government officials and political instability, among a host of reasons.

Against this background, big companies have been shutting down their operations in Zimbabwe, leaving thousands of workers destitute and disused mine shafts that are now being exploited by artisanal miners.”

These abandoned mines have not been rehabilitated, causing danger to surrounding communities.

They become a hive of activity as artisanal miners flock to mine gold in those disused shafts.

This has caused mines to collapse, which as a consequence, has killed and trapped tens of people over the past few years.

Dozens were killed in 2019 when artisanal miners were trapped at Silvermoon and Cricket Mines in Battlefields; more were killed in 2020 at Ran mine in Bindura.

Others became trapped, injured or have died in disused mines in Penhalonga, Chegutu, Esigodini, amongst many others.

In Zvishavane district, a young grade five girl died in 2013 after falling into an open pit which was part of a closed chrome mine.

With structured mining and good investment policies, Zimbabwe’s mining sector could prevent these occurrences from happening.

Currently, new investors from China, Zimbabwe’s new ally, have been disseminating anger across the country due to their mining operations.

These Chinese investors are taking advantage of the tenuous relationship between Zimbabwe and the West.

After its relationship broke down with the West, Zimbabwe implemented the ‘Look East’ policy which opened a window for the construction of small-scale operations by Chinese investors.

However, these investors often run into trouble with local communities which mine in similar areas as the Chinese.

In Penhalonga, some community members were buried alive in a shaft mine on a disputed claim by Chinese miners; in June 2020, the Chinese embassy in Zimbabwe was forced to issue a public apology after one of their investors shot a local employee over another dispute that was widely circulated on social media.

The law of unintended consequences and the Indigenisation and Economic Empowerment Act are irrevocably bound together.

Although the indigenisation of the mining industry was implemented with positive intentions, as evidenced above, it has led to negative consequences that necessitate the act to be repealed, at least significantly amended for the simple reason that it is doing more harm than good. As mentioned in our previous articles, there are alternate routes that could be taken to empower citizens and equitably distribute the wealthy, as demonstrated by neighbours in Botswana.

  • Obey Manayiti and Sophie Cullis are both graduate students at Columbia University in New York, USA.

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