Webby Banda Senior Researcher (Extractives) CTPD
The Centre for Trade Policy and Development (CTPD) wishes to note with great concern over the recent developments with regards to the exploitation of the Gold resource.
The government needs to slow down and engage in a consultative process to generate a formidable Gold game plan that will enhance the benefit of the citizenry from the resource. From the recent undertakings, it is clear that Zambia does not have one.
Gold discoveries across the country provide yet another opportunity for the Government to provide direction and guidance with regards to the exploitation of natural resources for the benefit of the Zambian people. The Government of the Republic of Zambia (GRZ) has declared Gold as a strategic mineral. This is to allow all citizens to duly benefit from its exploitation. However, the public seems to have a lot of concerns around the recent undertakings by ZCCM-IH. One such undertaking is the joint venture partnership with a Sudanese dominated company, Karma Mining Rural Services Development (KMRSD) Ltd.
This partnership has been actualized through a special purpose vehicle known as the Consolidated Gold Company Zambia (CGCZ) Ltd. CTPD wishes to note that there are several reasons as to why corporate entities enter into joint venture business partnerships. Some of these include:
- Creation of greater creativity and spur of innovation;
- Technological and skills transfer between the partners;
- Equity financing; and
- Reduction of business risk.
It is not clear why ZCCM-IH has chosen to partner with KMRSD when many Zambian dominated mining companies are crying for the same opportunity. The Government clearly needs to underscore its material motive. This will go a long way in shaping a progressive conversation in the gold mining sector. This will also help limit speculation by various stakeholders.
The government can only partner with a foreign-dominated mining company if it has exhausted all possible avenues and opportunities to partner with a local citizen-driven company. The following questions need to be addressed by the Government:
- Is the partnership between KMRSD and ZCCM-IH aimed at equity financing?; or
- Is the partnership aimed at creating a transfer of technology and skills from Karma to ZCCM-IH?; or
- Don’t local citizen influenced companies to have the capacity to partner with ZCCM-IH?
- The Centre also wishes to stress that deriving maximal benefit from the gold resource should go beyond the Karma and ZCCM-IH partnership. The government needs to put systems in place that ensure that ordinary citizens duly benefit from the gold resource.
The only way of achieving this is by supporting Artisanal and Small-Scale Gold Mining (ASGM) and recognizing that miners in this sector are an important element in the gold value chain. This support must not merely end at providing equipment but should also involve educating the miners. Formalization cannot exist without education, because the untrained small-scale miners will continue to use the same inefficient and environmentally dangerous techniques to mine and process the gold resource.
The government can utilize the services of the University of Zambia (UNZA), School of Mines and Copperbelt University (CBU), School of Mines and Mineral Sciences to initiate the training of artisanal and small-scale miners on efficient and environmentally benign techniques.
CTPD in conjunction with the University of Zambia (UNZA), School of Mines has just concluded research on Gold mining. This research will be launched before the mid-next month and will provide an opportunity for the Government to adopt some of the progressive recommendations put forward based on empirical evidence.
A thorough statement was issued by GRZ and ZCCM-IH. Even LT published “ZCCM-IH Defends Gold Partnership with Sudanese Owned Karma Limited” on 25th May 2020. Let’s focus on other matters.
I always say that Zambians have the worst memory. It not long ago Pius Kasolo was fired from ZCCM-holding, do you remember why? Now the answers are being answered by that Mabvuto something. Those Sudanese mafias may even kill Mabvuto.
UPND should start conducting interviews for CEO of ZCCM.
Nostrada? whatever you call yourself indeed upnd should start interviews for farm workers coz they will be retired to cattle realing which they know well, what makes you think pf will lose after discovering gold?
Sometimes as a layman one gets confused with what goes on in this Country especially with regard to decision making in the mining of our natural resources. Just who decides what exactly has to be done. Which people did the government empower to make decisions on how our Gold was going to be mined and processed in this Country. Where were these consultations and discussions made. Did someone just dream there has to be a partnership with this Sudanese company. What legal provisions are there when it comes to making important decisions of thins nature. Do we just leave such an important responsibility to be made just as an example, by permanent secretary in a given ministry. When do our lawmakers come in and decide for the people. No wonder some deals our Country has entered into have…
I’m just proposing that such investments of gold mining should be handled by act of parliament or parliamentary committee.
Why should the PF government handle the national asset solely?
Zambians must benefit from this gold and this is not coal which has been left to the Chinese exploiting my people in Sinazongwe district of Southern province.
We are talking about the the precious metal which can wipe out our international debt which has reached unsustainable levels.
The same gold can reduce poverty and improve the living standards of our people.
The problem is that these PF nyandules, sakalanyongos, lazos want to benefit over the ordinary Zambian people.
Let me tell you that that such partnership is illegal and we shall annull it when Bally comes into office…
Bally told you that these lunatics have no clue of what it means to develop a nation or to manage national assets. It’s like letting monkeys loose in a maize field!
Even a simple matter as conducting a due diligence seems too difficult! What is so had in letting a competitive process determine who partners with government?
Or simply floating the idea on the local stock market if it’s equity that was needed! Insteaf buying failed businesses from zambeef, this is the money they could have been invested in the gold venture!
Am very sure there is dirty deals going on in the dark! We wait FIC report that is if there will ever be one…..given the mfwiti threats!
The elephant in the room is how was Sudanese dominated company, Karma Mining Rural Services Development (KMRSD) Ltd chosen? What’s the background of Karma Mining Rural Services Development, is it a Chinese company?
Like the author has mentioned, I have always wondered why is govt does not use the services of the schools of mines at UNZA and CBU. Why should graduates be reduced to mere mining supplier’s, when they can be in the forefront of adding value to our resources.
@Zambian Citizen
No my friend. We need not focus on other things. Let’s focus on this issue a little longer. Let’s suspend this deal.
Here is why:
#Gold is not running away, let’s put it under guard as we sort out this messy deal.
#At the hands of FTJ and H² our mines were sold for a song. No one questioned. Once bitten, twice shy.
#Our people can mine that Gold. We should be good at extraction of precious metals. We have Zambian expertise at Kagem, other mines and at Universities, some are retired, recall them.
#Gold is precious, Zambia’s economic woes could be a thing of the past if we harnessed, nurtured and Jealousy mined that ore ourselves.
Reasons advanced by ZCCM IH sound kindergartenish.
Zambia is a country of English speaking people who fear to do projects on their own. They always want a foreigner to build even a toilet for them. Very ashamed to be a Zambian.
Looks like PF is succeeding in pushing the Trible HH to the top of the elections table.
Minister of mines, suspect No 1.
Watch “Zambian’s Want’s Their Gold Back #BringBackOurGold Wakeup Zambian Youth & SpeakOut.” on YouTube
@Thorn: but CGCZ only has an mpl (mineral processing licence). They will be buying ore from small scale miners who are all Zambians. Unlike the copper contracts of 2002, CGCZ will be run by both parties on a day to day basis as ZCCM-IH will appoint managers as well. The main gold project, Kasenseli mine is under ZCCM Gold which is 100% GRZ. Kasenseli will be a large scale mine that will explore, mine and process gold. This matter has already been clarified, my man.
CTPD has good arguments but do they have the power to persuade GRZ to rewrite the deal to benefit Zambians more than the Sudanese company? Why don’t we look accross the border to Botswana and Iearn from how their economy has profited from their mineral wealth?