SOURCES OF LAW AFFECTING THE MINING INDUSTRY IN ZIMBABWE
- The Labour Act [Chapter 28:01] – regulates the relationship between employers and their employees as well as their rights thereto. Under it is established the National Employment Council for the Mining Industry which, in turn, registered the Collective Bargaining Agreement for the Mining Industry to deal with the mining industry-specific rights of employers and employees;
- The Environmental Management Act [Chapter 20:27] – ensures that mining takes place in a manner that protects the environment in a sustainable way
- the Explosives Act [Chapter 10:08] – regulates the importation, transportation and use of explosives generally used in the mining industry;
- The Gold Trade Act [Chapter 21:03] – regulates the trade and dealings in gold. It generally prohibits the possession of gold by unauthorized persons;
- The Water Act [Chapter 20:24] – deals with the use and control of water bodies and the requirements for a water permit needed in mining projects;
- The Precious Stones Trade Act [Chapter 21:06] – regulates the possession of and dealings in precious stones;
The Mining law is principally regulated in terms of the Mines and Minerals Act [Chapter 21:05] and the regulations made in terms of that act, includes:
- The Mining (General) Regulations;
- The Mining (Management and Safety) Regulations.
- The Mining (Health and Sanitation) Regulations.
- The Mines and Minerals (Custom Milling Plants) Regulations.
- Another key piece of legislation in the regulation of Mining Law is the Environmental Management Act [Chapter 20:27].
Taxes and Royalties
Rules applicable to taxation of exploration and mining entities
Income tax on mining operations is levied at a flat rate of 15% for all minerals, and all capital expenditure incurred exclusively for mining operations is deductible at a rate of 100%.
- Mining companies enjoy an indefinite carry-forward of their tax losses.
- Investors are allowed to borrow locally for working capital purposes. Offshore borrowings require Reserve Bank approval, and interest paid on borrowings of a debt-to-equity ratio of up to a maximum of three to one is tax-deductible.
- A rebate of duty shall be granted to a holder of a mining location in respect of specified goods which, during a specified period, are imported by a holder for use solely and exclusively or mining development operations by the holder.
- A rebate on duty is granted on all capital goods imported for mining development operations and during the exploration phase of a mining project.
Royalties payable to the State over and above any taxes
There are royalties payable to the State calculated as a percentage of the gross fair market value of minerals produced and sold as follows:
- Precious Stones – 10%.
- Precious Metals – 3.5%.
- Base Metals – 2%.
- Industrial Minerals – 2%.
- Coal Bed Methane Gas – 2%.
- Coal – 1%.
Minerals Marketing Corporation of Zimbabwe
- To act as the sole marketing and selling agent of all minerals produced in Zimbabwe
- To purchase and acquire any minerals for its own account and to sell such minerals
- To encourage local beneficiation and utilization of any minerals
Zimbabwe Geological Survey
All new foreign investments in Zimbabwe require an Investment License issued by the Zimbabwe Investment Authority (ZIA).
The requirements are;
- A completed Form (ZIA 1)
- Application fee of US$500
- The Certificate of Incorporation/Registration for the joint venture company
- The official list of shareholders and/or directors of the joint venture company.
- A business plan or feasibility study of the joint venture.
- Proof of finance for the joint venture (the evidence of project finance may be provided in either bank statements, a confirmation letter from a bank, confirmed bank loans, other confirmed credit facilities and or equipment/machinery)
- Brief resumes/CVs for shareholders and/or directors of the joint venture company and copies of identification documents (national ID for Zimbabweans and passport and visa/residence permit for foreigners)
- A license fee of US$2,500 upon approval
- Applicable licences or permits from a relevant Regulatory Authority.
Once an Investment Licence is granted, such licence must be renewed at least three (3) months before the date of its expiry.
The first stage is to locate a site you are interested in.
Seek prospector licence (You can contact Mines office in the province you wish to register the block/mines)
The Prospector will verify weather your site is open for prospecting or not, if you cannot find the site for yourself, the Prospector will help you find the site.
- If the land is less than 100HA in which you want to peg a mine, then you ask for a written consent from the land owner, if the land is over 100HA then the Pegger, the “Approved Prospector” will notify the land owner about his/her intentions to prospect and peg a mine within that Land.
NB: if the farm is more than 100Ha the landowner is just informed but his consent is not needed.
- If the land is a State land, in some provinces, just inform the District Administrator for the intentions to prospect and peg, in some districts a letter of no objection is obtained from the rural councils at a cost.
- The Approved Prospector will then do the paper work together with the ground work.
- Within 31 days from the day of posting a prospecting notice, the Prospector will then submit the registration notice, pending for registration.
- The Ministry of Mines will issue a certificate of registration after their site visit.
- Ordinary licence; $200
- Special licence; $600
- Precious metal: $200
- Base Minerals :$300
- Special grant: $1000
- Site registration: $ 50
- Special block: $600
- Precious metals (i.e. gold): $500
- Base minerals (i.e chrome, antimony copper etc): $800
- Special base blocks (150 ha): $1 200
- Special grant is from $800.00
- Site Pegging: $400
Site Plan (95% accurate) from $500
- Beacon installation from $250 including beacon plates
- Cutlines from $0.25/m
- Procedures Introduction
Any foreign national/company willing to invest into mining should adhere to the local indigenization law which stipulates a 51% local ownership and 49% foreign ownership in a newly registered company.
Procedures And Criteria Of Obtaining Mining Claims.
- When a Prospecting Licence holder has identified a mineral deposit that he/she is interested in,
- He/she appoints an agent or an Approved Prospector to peg on his behalf.
- The agent is required to physically peg the area by marking the deposit with a Discovery Peg. he/she should also post Prospecting, Discovery and Registration Notices on the ground. The notices must be posted in a conspicuous manner to alert other prospectors.
- Before posting these notices, the agent is required to inform/or seek consent from the landowner of his intention to prospect.
NB: Consent is only sought from the landowner if prospecting on a farm less than 100 hectares, otherwise the prospector is only required to inform the farm/landowner in writing either by registered mail or deliver by hand.
- All areas classified as not open to prospecting and pegging or reserved against prospecting and pegging cannot be pegged, e.g. cultivated lands, dip tanks, Dams, etc.
- Each Prospecting License can peg up to a maximum of 10 claims at 1Ha each.
- An application for registration must be submitted to the Ministry of Mines and Mining Development offices. The application must have copies of the following attachments:
(a) Prospecting license(s);
(b) Prospecting Notice;
(c ) Discovery Notice (Base Minerals);
(d) Notification of intention to prospect to the landowner;
(e) A map in triplicate to the scale of 1:25000.
If the Provincial Mining Director is satisfied that all pegging procedures have been followed, he shall issue a certificate of registration upon payment of the gazette fee. This allows the holder to start mining operations subject to meeting other obligations like Environment Impact Assessment (EIA).
Within three months from the date of registration the miner is required to erect permanent beacons on the ground.
Gold Jewelry Permit Requirements Procedure
- Vetting by Police,
- Inspection of premises by C.I.D,
- Stating of annual weight of gold required &names and addresses of sources of such gold e.g. Fidelity Printers and Refiners,
- Clearance by Jewelry Council of Zimbabwe (applicant becomes a full member of this council),
- Payment of a prescribed annual fee (licence is valid for a year)
License To Deal In Precious Stones In Particular To Cut And Polish Rough
Diamonds Requirements Procedure
- Vetting by Police.
- Inspection of business premises by C.I.D for suitability & diamond security.
- Submission of Certificate of Incorporation and CR 14, Directorship & Shareholding structure.
Application for this is made to the Permanent Secretary and the license is valid for 10 years.
Special Grant For Coal And Energy Minerals Procedure
Application is made to Secretary, MAB who:-
- Acknowledges receipt by date-stamping and assigning an application no. e.g. SG 1/16, SG2/16, SG3/016 denoting the sequence in which they were received and the year received)
- Also checks fulfilment of legal requirements of the application.
Criteria for Recommending Special Grant Applications
The MAB considers every application brought before it and reports thereon to the Minister with its recommendations, whether the application should be granted or refused. In consideration of the application the MAB looks for the following:-
- The background of the applicant(s).
- Their programme of work.
- Proof of technical expertise.
- Whether the applicant is a fit and proper person to be issued with a special grant.
- The financial status of the applicant.
- Whether it would be in the national interest to issue the special grant.
Gold Jewelry Permit
License To Deal In Precious Stones