Roberta Katunga
Business Reporter
MINES and Mining Development Minister, Dr Obert Mpofu, has defended the increase of royalties paid to the Government and administrative fees in the mining sector saying the decision was made for the good purpose of meeting national expectations.
Speaking at the official opening of Mine Entra last week, Dr Mpofu said the review was done after extensive consultations and for the industry’s sustainability. I am aware that stakeholders have raised concerns on the increase of royalties and administrative fees in the industry. I would like, therefore, to assure you all that these increases were arrived at after extensive consultations and were done for the good purpose of meeting national expectations and industry’s sustainability,” said Dr Mpofu.
Dr Mpofu was responding to concerns by the Chamber of Mines and other stakeholders with the adverse effects the hiking of fees might have on the sector.
In a speech read on his behalf, chamber president, Mr Winston Chitando, said the miners were recommending Government to put on hold proposed charges because of the strong negative impact in the future.
“The royalties’ rate increases are too high and will affect the sector as well as increase the cost of production and this will in turn affect the projected growth that was outlined in the MTP 2011-2015,” he said.
The Permanent Secretary in the Ministry of Mines and Mining Development, Mr Prince Mupazviriho, said the ministry was ready to engage the Chamber on their recommendations and propositions and suggested that they meet and discuss the issues in order to reach an understanding.
“We are aware of the concerns of the Chamber and as a ministry we are willing to listen to their propositions. I suggest we meet next week in Harare,” he said.
According to the Chamber of Mines, the MTP had projected that in 2012, the sector would record a 20 percent growth but due to constraints that figure has been revised downwards to 13 percent, 2013 was 18 percent but now at 12 percent while 2014 was 19 percent but is now pegged at 9 percent and in 2015 the growth was projected at 8 percent but is now at 5 percent.
The miners also complained that the country’s labour laws were skewed towards the employees further increasing the costs of production.
“The costs of retrenchment are expensive and the laws are in favour of the employees and this affects the final product,” said one representative of the mining industry.