Who is harming ZCCM-IH and Zambia’s interests ?
1.1 Former Government Policy on Gold
In a statement on 24 May 2020, Former PS Mines Barnaby Mulenga explained that the PF Govt gave a mandate to ZCCM-IH to coordinate efforts to purchase the gold from artisanal miners and to coordinate all gold trading business in Zambia.
The former PS Mines also said stance of PF Govt was that all gold from Artisanal miners and ZCCM-IH golden mining is bought through ZCCM-IH to Bank of Zambia to build strategic reserves for the country and thus to strengthen the kwacha. The former PF Govt declared gold as a Strategic Mineral meant to allow all citizens to benefit from its exploitation.
1.2 Operation of the Kasenseli mine in Mwinilunga district
Zambia Gold Company Limited (ZGCL) obtained the Small-Scale Mining Licence number 26457-HQ-SML for Kasenseli Gold Mine on 16th June 2020 after following all statutory and regulatory approvals from relevant Government entities and stakeholders including the Ministry of Mines and Minerals Development, the Zambia Environmental Management Agency (ZEMA) and the Chibwika Chiefdom.
ZGCL has obtained the mining licence to exploit the gold deposit but the management is carried out by Kasenseli Mine. The shareholding is as follows: ZGCL (ZCCM-IH 51%,Ministry of Finances 49%) 70%, Chief Chibwika 5%, the two previous licence holders Kampoko Resources with 12.5 percent and PCB Mining 12.5. (ZGCL’s press Statement,
Despite its meagre resources, ZCCM-IH financed all the equipment needed for mining and put in place the technical staff, with K45 million of capex initially, rising to K120 million.On several occasions, former PS Mines Barnaby Mulenga and former Mines Minister Musukwa visited the site and congratulated the ZCCM-IH teams for their professionalism, the work they had done and the rapid start-up of the Mwinilunga mine in the face of the national emergency to sustain the kwacha.
On 5 october 2020, the project being developed by ZCCM-IH has so far produced 50 kilograms of gold worth USD $3 million. (Appendix 1)
On 19 July 2021, BoZ has purchased 86.84 Kgs of Kasenseli Gold since december 2020 at a cost of K103.8 million. (Appendix 2)
More than 140 Kgs of gold were extracted from mining operations in Mwinilunga since mining commenced. The Chief Chibwika’s comments on the failure of the operation were therefore completely false and misleading. The amount of gold produced at Mwinilunga is all the more satisfying given that ZCCM-IH’s teams face a number of challenges: fences are constantly being destroyed (Appendix 3), gold ore stolen and equipment ransacked by
Jerabos who seem well coordinated and organised. On each occasion, ZCCM-IH had to replace the equipment and rebuild the fences.
By October 2021, ZCCM-IH had purchased new machines that would have increased raw material processing by a factor of 20 per hour. « The setting up process for the new machinery was almost complete when the government suspended the mining and processing activities at the gold mine ». (Appendix 4)
2. Closure of the Kasenseli Gold mine
On 23 october 2021, Mines Minister Paul Kabuswe has suspended operations and said “What I can tell you is that the new dawn government always has the best interest of the nation and workers at heart. This is not a decision that will take forever. We have given ourselves maybe within a month to be able to resolve all the issues” said
Kabuswe. (Appendix 5)
« If we fail within a month, at the most maybe 60 days just to make sure that all the salient
issues are actually dealt with. »
Two years later, the mine is still closed…
3. The Reasons do not hold water
During his visit to Kasenseli Mines Minister Paul Kabuswe vociferated against the ZCCM-IH teams, questioned their professionalism and lynched them in the Media. This is unfair and disrespectful given the hard work of the ZCCM-IH teams. Why should ZCCM-IH be responsible for the death of illegal Mwinilunga Jerabos outside its mining concession? It is the duty of the state! ZCCM-IH, a listed company, does not have to make up for the failings of the Zambian State. What did the Minister of Mines do to prevent these looters and illegal foreigner miners from plundering national assets or ensure the safety of these Jerabos ?
3.2 Questionable behaviour of Mines Director Mooya Lumamba
One can be surprised by the zeal and regulatory arguments used by Mines Director Mooya Lumamba to suspend the exploitation of Kasenseli mine after a year and a half, while the former Mines PS and Minister have visited the site several times. Why did Mines Director Mooya Lumamba not advise the ZCCM-IH teams before? We would like him and his colleagues to use the same firmness and toughness to bring to heel the mining companies that do not be fair with ZCCM-IH or those whose miners denounce the working and safety conditions.
3.3 Strange « social license »
ZGCL has undertaken corporate social responsibility initiatives as such sinking of a water borehole, solar powered with 10,000 litres tank capacity, 3 water collection points in Kasenseli, a Rural Health Centre and moreover corporate social investment initiatives as such working on the main roads (Appendix 6). Kasenseli Gold mine is the only mine project in the country in which the community holds a shareholding at 5 % through the
Chibikwa chiefdom Trust. (ZGCL’s press Statement, 23/08/2021) Mines Minister Kabuswe said “You may wish to know that the Zambia gold company has lost its social license with the people ». (Appendix 5)
What is this strange « social licence » ?
In an English court ruling, 2,500 residents , including 643 children, of the villages of Shimulala, Kakosa, Hippo Pool and Hellen, near the Nchanga copper mine, were found to be victims of pollution and poisoning generated by the Vedanta-run KCM operation. Where was the so-called social licence of KCM ? Similarly, we are eager to know the « social license » of Kobolds’ Mingomba and FQM’s Kalumbila Nickel mines…
4. Disastrous consequences
4.1 « ZCCM IH profitability questioned »
This is the title of an article in the Zambian Businnes Times (edition of 8 November 2023), which rightly points out that the profitability of ZCCM-IH is only 1%, which is very low compared to standards… When millions of dollars are invested in developing a mine and they are unsuccessful because of shady decisions and political interference, this cannot be otherwise…
4.2 Collapse of the kwacha
The mandate given to ZCCM-IH was to mine Zambia’s gold and sell it to BoZ in order to significantly strengthen the kwacha. Analysts say the indefinite closure of Kasenseli gold mine has also put the build up of gold
reserves by the BOZ in disarray, contributing to the streak of the Kwacha depreciation.(Appendix 7)
Yesterday, Bloomberg anounced that Zambia’s kwacha falls to a record low against the US dollar… (Appendix 8)
4.3 Job losses in the Mwinilunga district
Few months ago, Mwinilunga town Council Chairperson Jonathan Chinyimba has called upon President Hakainde Hichilema to quickly push up reopening of Kasenseli Gold mine.He said the delay has caused the people of Mwinilunga to remain in poverty, and remain without employment as youths are crying day and night. (Appendix 9)
In June 2012, late President Sata said Zambia was tired of moving with a “begging bowl” from one developed country to another as the country had the capacity to become self-reliant and lift its millions of unemployed youths out of poverty if its vast natural resources were exploited to the benefit of Zambians. These words ring out bitterly now with the closure of the formidable Kasenseli gold mine…
5. Very fishy situation
The consequences of the mine’s closure are catastrophic for the kwacha, leading to inflation and therefore high prices, as well as a lack of work and development in the Mwinilunga district.When Mines Minister Paul Kabuswe closed the mine, he said : “ What I can tell you is that the new dawn government always has the best interest of the nation and workers at heart (cf 2).
In July 2022, President HICHILEMA said he will resolve all outstanding issues at Kasenseli Gold Mine and making the mine operational is top priority for government (Appendix 10).The mine is still closed despite reasons that do not hold water, affecting the interests of the country and the people of Mwinilunga.
Moreover, there have been recurring rumours on social networks and in the press about illegal mining and hijacking at the mine since the closure and the end of ZCCM-IH monitoring.So why cannot ZCCM-IH use its mining licence? Who has a vested interest in ensuring that ZCCM-IH does not control the mining and exploitation of gold? Who are the bigwigs who have an interest in keeping the Kasenseli gold mine closed?
We would request anyone with information about this very fishy situation to get in touch with us.
Spokesperson of Minority Shareholders of ZCCM-IH
10 November 2023, FRANCE.