Who s who in Zambian mining?

Transcription

1 Ministry of Mines and Minerals Development Who s who in Zambian mining? A short guide to the actors in Zambia s mining sector and their roles The Mineral Production Monitoring Support Project This guide is made possible with support from the European Union

2 2 THE MINERAL PRODUCTION MONITORING SUPPORT PROJECT

3 Welcome to this short guide on who s who in Zambian mining! Zambia s rich mineral endowments have translated into a substantial mining industry, which is a major contributor to revenue for the country. We often hear about the various different actors in the mining sector, but it s not always 100% clear which role each actor is supposed to play in the mineral value chain. Without this understanding, holding our institutions or companies accountable or achieving more transparency is a little more difficult. This guide gives you a simple introduction to the main government departments, institutions, companies and civil society organisations involved in Zambia s mining sector and explains what their roles are. This guide is made possible with support from the European Union and the Mineral Production Monitoring Support Project. To learn more visit This guide is made possible with support from the European Union 3

4 Who s who in Zambia s mining sector? The Ministry of Mines and Minerals Development The Ministry of Mines and Minerals Development (MMMD) is the leading institution mandated with governance over the mining sector in Zambia. It implements the Mines and Minerals Development Act (2015), which empowers MMMD to oversee the issuing of mining titles (exploration and mining licences), import, export and mineral trading permits, as well as to verify the monthly production reports submitted by the mining companies. 4 THE MINERAL PRODUCTION MONITORING SUPPORT PROJECT

5 The Zambian Revenue Authority The Zambian Revenue Authority (ZRA) is tasked with the calculation and collection of royalties, based on the production reports and the royalty reports submitted by mining companies and verified by the MMMD. This includes checking and confirming the value of all metals, minerals and gemstones being produced and sold. ZCCM Investment Holdings PLC ZCCM Investment Holdings PLC (ZCCM-IH) is a holding company, majority owned by the Republic of Zambia, which holds interests in mining companies on behalf of Zambia. It grew out of the earlier Zambian Consolidated Copper Mines company, which was the former State-owned mining enterprise carrying out all commercial mining in the country. ZCCM-IH has a shareholding in most of the mining companies in Zambia. 5

6 Mining companies The mining companies are those businesses which explore for minerals and extract these from the ground, having obtained licences from the government of Zambia to do so. They then sell these to local or foreign parties. They pay royalties based on the value of these minerals or metals extracted, the reason being that they have reduced the mineral wealth of the country, for which they need to compensate. Like any other business they pay taxes based on the profits made. Mining companies are largely owned by individuals or institutional investors who are prepared to take the risk that their investments will pay off when the mines are profitable. Minority shareholdings in these companies might be held on behalf of the people of Zambia through ZCCM-IH which in turn is controlled by the Industrial Development Corporation (IDC). The IDC was established to create and maximise long-term shareholder value as an active investor and shareholder of successful state-owned enterprises. Customs The customs department under the Zambian Revenue Authority is responsible for collecting tariffs and for controlling the flow of goods in and out of Zambia s borders. These include refined metal, concentrates and other mineral products. Customs inspectors examine all goods entering and exiting the border. 6 THE MINERAL PRODUCTION MONITORING SUPPORT PROJECT

7 The Zambian Extractive Industries Transparency Initiative (ZEITI) The Zambian chapter of the Extractive Industries Transparency Initiative (EITI) is the local coalition of donors, mining companies, civil society organisations and government that promotes transparency in the sector. ZEITI collates the recording of all payments made by the mining industry, and reconciles these with payments received by the various government agencies. Though government is an important stakeholder, ZEITI is an independent initiative. This information is then made available to the public for scrutiny. The Central Statistical Office The Central Statistical Office (CSO) coordinates with Zambia s Ministries, enterprises, organisations and institutions to provide timely, quality and credible official statistics for use by stakeholders. These include aggregated mineral export data. 7

8 Parliament Did you know? The European Union has also funded a 3.7 million project providing support to the National Assembly of Zambia. The objective of the support to Parliament is to enhance economic governance in Zambia through improved public financial management and strengthened accountability processes! Parliament, consisting of the National Assembly, is the highest authority in Zambia and is accountable to the people. Parliament approves and enacts legislation, and all people, companies and public sector institutions in Zambia must then act in accordance with those laws. Where individuals in the country want to effect legislative change in the country, one option available is for them to address their issues to their Member of Parliament, who could arrange for debate on the issues raised through the introduction of a Bill in the National Assembly. The National Assembly also has the power to move on its own and propose laws based on the policy decisions of the executive branch of government. Civil Society Organisations Civil Society Organisations (CSOs) are the third sector of society, not representing businesses or government, but rather advocating on behalf of the public and communities to help form policy, support ZEITI, and hold governments and mining companies to account. 8 THE MINERAL PRODUCTION MONITORING SUPPORT PROJECT

9 Local Councils and Municipalities These institutions are part of the grassroots level of democratically-elected government and are therefore closest to the people who may be affected by government policies or by mining companies local activities. Under the Republican Constitution, every district should have a local authority accountable for their area. One of the key functions of local authorities in relation to mining companies is the collection of property rates, a statutory payment imposed on all owners of state land in Zambia. Rates are determined by local authorities according to the developments on the land in question. Zambia Environmental Management Agency Zambia Environmental Management Agency (ZEMA) is the country s independent environmental regulator. It is mandated to protect Zambia s environment, control pollution, and ensure the health and welfare of people, animals and plants in relation to the environment. ZEMA requires any person that undertakes any project which may have an impact on the environment to obtain their written approval. Both exploration and mining activities require environmental approval from ZEMA. 9

10 The life of a mine And which player is involved at each stage Mining is not a process that lasts forever. There are a number of separate, distant stages between identifying a mineral resource and building a functioning mine. Various institutions in Zambia have different roles at each stage. Here is a very simple guide to what happens in each stage in the life of a mine, and which institutions play a major part at each point in the journey. 1 EXPLORE 2 DISCOVER 3 BUILD 4 MINE 5 CLOSE 10 THE MINERAL PRODUCTION MONITORING SUPPORT PROJECT

11 1 THE LIFE OF A MINE Exploring The prospecting and exploration process is very long it usually takes many many years. The exploration or mining company searches for an orebody through activities including: Geological mapping Sampling of soils and rocks Geophysical investigations and eventually drilling There is a high risk of failure most exploration projects never become a mine! The environmental and social impacts are limited. The Geological Survey Department (GSD) of the Ministry of Mines and Minerals Development is responsible for the geological mapping of Zambia, and for compiling these maps for publication. Exploration companies use these maps and other mineral-related data held by the GSD, to inform them in the search for economic ore deposits. The Cadastre Department in the MMMD is responsible for the issuing and administration of mineral titles, including exploration licences. It holds a comprehensive register of mineral titles in Zambia, including maps of licence locations and boundaries, which is the fundamental source of data in case of disputes between licence holders. You can access the Mining Cadastre online at:

12 THE LIFE OF A MINE 2 Discovery! When an exploration company succeeds in finding an ore body of a mineral or gemstones, which is not often, it first needs to work out if mining could be worthwhile. This is determined by conducting a feasibility study. The company then needs to obtain a mining licence before any further work can take place. Applications for mining licences are processed by the Cadastre Department and all licences are approved by the Minister of Mines. An Environmental Impact Assessment must also be submitted to ZEMA for approval. Without that environmental permit, a company may not start mining. A feasibility study is carried out A licence to mine is obtained from the Minister of Mines A permit is required from ZEMA 12 THE MINERAL PRODUCTION MONITORING SUPPORT PROJECT

13 3 THE LIFE OF A MINE Building the mine During this stage, a lot of work is done to create the mine as a factory to produce ore or gemstones. The work would include things like: Putting up buildings and processing plants Building roads Sinking shafts Pre-stripping open pit areas This is the stage where most people are employed. Work permits must be obtained prior to any construction. After the development stage, a mine can start producing and processing ore. 13

14 4 THE LIFE OF A MINE Mining Over the lifetime of a mine, the mining and processing stage is the longest one it often lasts decades. A great many activities are all happening at the same time: Extracting the ore from the ground, either from underground or from an open pit Processing the ore through various steps, depending on the character of the ore Monthly reporting on the production quantities and qualities of all mined materials to the MMMD Paying royalties (based on the quantity and value of the materials extracted) to ZRA Selling the various products, either for further processing into the final product (such as copper cathodes) or exporting the final product Paying taxes based on profits to ZRA For all these activities the Ministry of Mines and Minerals Development have an oversight role to ensure that the mining company abides by the laws of Zambia and operates within its own stated plan. The MMMD conducts regular inspections to check. 14 THE MINERAL PRODUCTION MONITORING SUPPORT PROJECT

15 5 THE LIFE OF A MINE Closing the mine When a mine has depleted the orebody, or when the remaining material becomes too expensive to mine (it might be too deep, or too low in quality) then it needs to start what is called a closure and reclamation process. This includes dismantling the various buildings, plants and other infrastructure, reclaiming areas like waste and tailings dumps, and closing up any open pits. This is to ensure that the eventual environmental impact will be minimised. The mine is dismantled The pits are closed The environment is restored Approval needs to be obtained from the Mine Safety Department and from ZEMA, so that the potential risks are properly managed. 15

16 Where can I get objective facts about all these players? Now that you know who all the players are, and their role in the Zambian mining sector, you might want to know where can I get the facts and figures on how they are performing their role? There are a number of places you can go for this information. QI want to know how much tax a particular mining company, or all the mining companies together, have paid to government? A: The Zambia Extractive Industries Transparency Initiative (ZEITI) publishes how much tax was paid by every mining company in Zambia in its annual reports which are available to everyone. There is a delay between the year being reported on and when the report is actually published (to ensure that all the data is correct and independently verified) but all the information is available on their website or their hard copy reports. For more recent data, you can also ask the Ministry of Mines and Minerals Development. Contact: ZEITI: MMMD: infor@zambiaeiti.org info@mmmd.gov.zm alexandernyirendat@gmail.com 16 THE MINERAL PRODUCTION MONITORING SUPPORT PROJECT

17 QHow do I find out what my local mining company is producing? A: All mining companies operating in Zambia are required to report to the Ministry of Mines and Minerals Development what their production figures are, which are then scrutinized by the mineral economics team at the MMMD to ensure they are accurate and correct. Sometimes mining companies are inspected. Once finalised and verified, this information is then published quarterly in a Ministry newsletter and on their website. Contact: MMMD: info@mmmd.gov.zm alexandernyirendat@gmail.com QI want to know if my local mining company is complying with the law? A: Your first port of call should be the Ministry of Mines and Minerals Development, as they are responsible for carrying out mine inspections. If you suspect the problem is environmental, you can also contact the Zambia Environmental Management Agency (ZEMA). It is also worth noting that the law (the Mines Act) gives any person or a group of persons the right to bring a claim and seek redress in the courts of law in respect of the breach or threatened breach of any law relating to damage to the environment, biological diversity, human and animal health or to social-economic conditions. Contact: MMMD: ZEMA: (Lusaka head office) info@mmmd.gov.zm alexandernyirendat@gmail.com

18 QI want to know what the government did with the tax money it received from the mining sector? A: Parliament itself is accountable for sharing this information with you, and explaining exactly which projects Zambia s tax revenue has been funding through the national budget. Contact your Member of Parliament to meet with them so that they can answer any questions you might have at either a local or national level. You can also refer to the Auditor General s report published annually which, among other things, indicates whether the money raised and spent by Government has been applied for the purpose for which it was raised and whether it was used economically, efficiently and effectively. Contact: Your MP or Parliament: info@parliament.gov.zm webmaster@parliament.gov.zm QHow can I get a law regarding the mining sector changed or amended? A: Your Member of Parliament and Parliament are accountable for helping to shape policy or change the laws in Zambia. Additionally, you can also present your concerns to certain CSOs or Non-Governmental Organisations who in turn can lobby Parliament to make changes to the law. Contact: Your MP or Parliament: info@parliament.gov.zm webmaster@parliament.gov.zm 18 THE MINERAL PRODUCTION MONITORING SUPPORT PROJECT

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20 Ministry of Mines and Minerals Development About the Mineral Production Monitoring Support Project to the Ministry of Mines and Minerals Development ( MMMD ) The Mineral Production Monitoring Support Programme (also known as MPMSP ) to the Ministry of Mines and Minerals Development is located in the context of a broader European Union Delegation programme to strengthen economic governance in Zambia. The objective of the MPMSP is to strengthen the ability of the Ministry of Mines and Minerals Development to fulfill its mandate as mining authority to monitor effectively mining activities and mineral production in Zambia, and to share this information with other relevant Government of Zambia agencies to increase domestic revenue mobilisation. The European Union has allocated funding of EUR5.37 million to the project, which will conclude in early To learn more about this project, its impact and results, please visit us online: