The Sunday News
Gabriel Masvora Business Editor
SOUTH Africa and Zimbabwe occupy first and third position respectively in world platinum production accounting for a combined 75 percent of global total output.One of the main uses of platinum is as a catalytic converter in automotive engines.
However, with such a critical component in the automotive industries coming out of the two countries’ bellies, the same cannot be said on the direct benefits of the mineral to the people in the respective neighbours.
Countries that have grown big in the automotive industry include Germany, Japan and United States among others — most with not even a single trace of platinum on their lands.
However, their industry is booming while Zimbabwe and South Africa are content with re-importing their refined platinum now safely tucked in car engines.
The automotive industries in South Africa and Zimbabwe are far from those car manufacturing giants.
In South Africa at least, there is still some assembling going on although most of the parts are still not being manufactured in the country while in Zimbabwe car assembling or manufacturing of any car component is now largely part of our nostalgic recollection.
The situation on the ground in the two countries clearly shows that their people are far from benefiting from such a commodity they control at least by mining.
While the two countries continue to feel the pinch of excavators turning their surfaces around, their people never see the benefits and continue to wallow in abject poverty.
Countries in other continents and their residents are scooping the honey from Africa’s resources while its own people continue to suffer.
In South Africa in spite of the so called “plastic surgeried economy” most of its residents are very poor as evidenced by the restlessness they exhibit often.
In Zimbabwe too many companies have closed and many people have turned to low income and small businesses which do not measure to the vast abundance of resources in the country.
As Zimbabwe and the whole continent celebrates Africa day tomorrow, once again focus will turn to the personal unity which binds people of the continent but on whether the people have also used what belongs to them to improve their lives.
Global estimates show that Africa is probably the richest continent in terms of minerals but remains home of some of the poorest communities.
The question then must be why do people in Africa continue wallowing in poverty while the honey pot continues to ooze sweetness.
“In mining over the years countries in Africa have tended to celebrate figures of how many investments have come in, how much they are exporting and how much they are getting in tax,” Dr Oliver Maponga of the United Nations Economic Commission for Africa which is headquartered in Zambia told mining executives at the Chamber of Mines Conference in Victoria Falls in Africa.
“There has been little emphasis on measuring the impact of mining to development in the communities in which these mining activities are being carried out.”
As such, added Dr Maponga, communities in Africa were witnessing little if at all any benefits from the resources that are extracted right under their feet.
“Communities in Africa do not see the development from all the mining activities going around them.”
True to that in Zimbabwe, apart from small time projects, most mining giants have never carried out any meaningful developmental projects from mining revenues.
A few years ago, Zimbabwe discovered large deposits of alluvial diamond mines in Marange, Manicaland and a number of mining companies were granted licences to mine in the area.
The companies now report that the alluvial diamonds have run out but surprisingly there is nothing to show that this was a province or rather a country that had such vast quantities of the diamonds.
Not even a shopping mall built from some of the money from the diamonds is there to show as evidence that we had such diamonds in the country.
“Governments must ensure that their citizens are adequately and optimally rewarded from the mineral resources. Communities must also be adequately compensated. They need to participate right in the whole value chain of mining in their areas,” said Dr Maponga.
Mines and Mining Development Minister Walter Chidhakwa said while the country continued to celebrate mention of billions worth of minerals being exported, it was also prudent to quickly explore the issue of value addition and beneficiation so that the country and Africa benefit at large.
“The continent is richly endowed with mineral reserves and ranks first or second in the quantity of bauxite, cobalt, industrial diamond, phosphate rock, platinum group of metals vermiculite and zirconium,” he said.
But, added Minister Chidhakwa, it was still way behind in the production of the end products that come out of these minerals.
He said the Government wanted a paradigm shift from the traditional export of raw materials to export of processed finished goods.
He admitted though that this was a big challenge as evidenced by the continued lack of progress and cooperation from the mining companies in spite of numerous calls to value-add their minerals.
“To some of you, our value addition and beneficiation initiatives may not be served on a silver platter, but as Government we reiterate that the people of Zimbabwe need to fully benefit from its resources.”
The Minister also said it was worrying that even after Government came up with a clear position of indigenisation especially in the mining sector which notes that 51 percent of all mines must be in the hands of locals, it was disturbing that there were still murmurs of how to implement it when the law was very clear.
Worse, there was little progress in implementing the law.
Blanket Mine in Gwanda is one of the only big mining companies in the country which has implemented the law while other major mining companies are still to implement.
Outgoing Chamber of Mines president Mr Alex Membere, who is the chief executive officer of Zimplats, the country’s major platinum miner and exporter said the country must have a shared vision which must also be in sync with the African Mining Vision of which Zimbabwe is a member.
“Within the African Mining Vision, we need to craft our own Zimbabwe Mining Vision that is unique to us, that is inspired by our own values, based on creating values and importantly, sharing the benefits,” said Mr Mhembere whose company has been in the eye of a storm for failing to beneficiate the platinum and failing to follow indigenisation laws.
South Africa’s Impala platinum owns 87 percent of Zimplats and 50 percent of another local platinum mine, Mimosa.
Mr Mhembere, however, said mining companies were committed to engaging Government and other stakeholders.
“I believe this will enable our industry to grow and contribute its share of wealth into the Zimbabwean economy to benefit all its citizens,” he said.
But the feeling is that most foreign companies in Africa have been lip synching about benefiting the local people.
In Zimbabwe, for example, most companies know about the law but still deliberately fail to implement it.
They have come up with tactics such as threats of withdrawing their services, in the process blackmailing Governments.
“We all know that most African Governments do not have the capacity and capital to carry out major projects and these companies because they have the money, they use that to dictate the terms of investments. They use that as a way of blackmailing the Government and continue to do so,” said a delegate who attended the conference.
Worse still, these companies pretend to help communities by sponsoring minor projects that are just a minute fraction of their profits.
“What is worrying is that if you look at the few projects that these companies say they have sponsored, they actually choose what to sponsor, they do not even consult locals on what the local people want. More surprisingly, we are never told that this blanket donation is what fraction of the profits that they have made. We have companies who will tell you we are sponsoring soccer while they are surrounded with communities with no schools or clinics. But if you ask what the community would prefer definitely they would want schools,” added another gold.
Faced with such greedy capitalists, Africa needs to quickly wake up and smell the coffee.
Countries and even regions have some sort of competitive advantage that they can leverage and ensure that their economies and their communities benefit.
Dr Maponga said Africa needs to start to think like oil producing countries.
They virtually control the market because they are the producers and everyone who does not have the commodity has to follow what they want.
In Africa most mineral prices are determined by countries, some of which do not have the commodities.
“We need to integrate communities into mining. For example small scale miners must become part of rural development in Africa by encouraging local people to participate right from mining to marketing,” said Dr Maponga.
Alternatively, he said, African countries with a common competitive advantage can form strong partnerships which will benefit from its resources.
“Zimbabwe and South Africa can actually form a platinum belt. Some sort of industry to say since we are the biggest producers we must have all platinum products processed and made in the two countries so that anyone who wants to buy platinum products will come to the two countries,” he said.
But like many other initiatives in Africa, such ideas have largely remained paper projects while the reality on the ground is that as we celebrate another day of African solidarity and brotherhood, our resources continue to prop far away communities while we watch helplessly as our minerals are being exploited.
Mind you, minerals are not renewable sources.
