Our mining industry: Fair deal required!


LITTLE did I know on the day-break of 9th December 1961 that our independence was poised to encounter some hurdles camouflaged in what appeared as a euphemistical self-governing nation, but unknowingly, there were hoax inspired foreign machinations, aimed at making early independent African countries dependent on their former colonisers!

Dominance of influence with the former colonisers came to be known as neo-colonialism, destroying attempts towards economic emancipation! Indeed, political independence has proved to be an illusion without economic emancipation.

Unfortunately, neo-colonialism cannot thrive without the complicity of Africans themselves, those of our people who have no shame in participating in the robbery and rape of their motherland for personal gains. With this complicity of the greedy locals, the developed countries could manage to plunder our natural resources for so long, leaving our people in abject poverty while developing their metropolis with unlimited sophistry.

It reminds me of my good reading of that book by Walter Rodney, “How Europe Undeveloped Africa.” We are truly now engaged in economic war which is more difficult than the decolonisation wars.

It is foolhardy to blame the former colonial powers without exposing the complicity of the African political elites who are bought cheaply with money and board positions to shield the corporate plunder of Africa’s natural resources.

In other words, the economic war is harder and more complicated because we must fight our own brothers, those of our educated classes who otherwise should have been the ears and eyes of the poor.

Thanks to our no-nonsense committed President, JPM; he is uprooting one after the other and showing them the way to either Segerea or Keko prisons! This time round there cannot be a soft option of Community Service sanctions.

Africa is endowed with abundance of natural resources, to the envy of foreign investors. It is the home of 30 percent of the worlds’ minerals, yet is in the receiving end as the bargaining and negotiations powers are adroitly designed to favor those foreign investors.

All this is coming out against a backdrop of international reports that supports the belief that multinational corporations are engaged in widespread and systematic underreporting of mineral exports from Africa.

A high-level panel report released in 2015 by the African Union (AU) and the UN Economic Commission for Africa (UNECA) argued that $50bn of capital drains out of the continent each year through “illicit financial flows”.

South Africa’s former president, Thabo Mbeki, who chaired the panel, said “large commercial corporations are by far the biggest culprits”. However, the panel’s calculations were not based on actual cases, but on interpreting mismatches in international trade data as evidence of customs fraud.

Africa is now waking up from a deep slumber. Similar case is happening in Nigeria, where representatives of a subsidiary of Shell, Anglo-Dutch oil major company, appeared recently before a court in Lagos; the government says the firm owes $407m for undeclared oil exports.

And in South Africa, the government had recently introduced new rules, requiring local mines to be 30 percent black-owned in perpetuity, toughening existing requirements and implying hefty dilution for shareholders.

The measures, called Mining Charter 3, put at risk funding for Sibanye’s $2.2bn acquisition of Stillwater Mining Company of the US, the biggest foreign takeover by a South African mining company in 16 years.

A number of institutional investors have pulled out of the bond process, saying the risks in SA were just too high and it’s becoming ‘uninvestable’. Companies and investors say the new rules and uncertainty will starve the industry of much-needed capital, shortening mine lives, reducing profits and adding to existing challenges of declining reserves and increasing costs.

Most mining companies already offloaded 26 per cent stakes and even entire mines to black investors at preferential rates in the 2000s to comply with previous rules, believing it was a one-time deal.

However, after mounting pressure from the investors on the Charter 3, the government had to backtrack on the immediate implementation of the contentious Mining Charter, a move welcomed by the Chamber of Mines.

The chamber said in a statement that Mineral Resources Minister Mosebenzi Zwane and his department had given a written undertaking not to implement or apply the provisions of the 2017 reviewed charter, pending judgment in the urgent interdict application brought by the chamber.

Africa has to turn around its mining industry not to allow this exploitation by foreign investors to continue unabated. In Tanzania, with the acceptance of Acacia of yielding to the increased royalty to six percent is a little battle won; now let us address ourselves to the remaining big war, which is tougher and sophisticated.

It is a war of intellectual nature as the multinational companies holding all the bargaining powers are crying foul that mining company considering new or additional capital investment in Tanzania must take into account the major overhaul of Tanzania’s mining industry laws, regulations which are dramatically increasing both cost and risk for the investors.

Two, they are of the opinion that Tanzania must urgently prioritise genuine accountability, responsibility and transparency in its own government at all levels.

They go further and say that Tanzania must also acknowledge and actually fulfill all of its contractual and legal commitments and obligations to companies that already agreed to invest and operate in TZ before it can hope to attract and retain additional investments.

And they end by bemoaning the arbitrary ignoring or renegotiating of contracts which is an indication of potential results of a “road to ruin” as demonstrated by failed states like Venezuela and Zimbabwe.

Could these concerns be a ‘dying horse kick’! Are they the only investors in this world? Lest we forget, our genuine friends, the Chinese who rescued us in the construction of the Tazara railway after the Western World had backed out!Ours appears to be an argument of fair deal against super interest as favoured by the investors; we need a fair deal to investors and owners of the sovereign state.

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