1. INTRODUCTION

The Regulatory Impact Assessment is being proposed by the Ministry of Mines and Minerals Development ((hereinafter referred to as the “Ministry”) to introduce a Statutory Instrument (SI) to restrict the number of mining rights to five (5). This was after consultations with Government and quasi Government Institutions, Private sector (Mining Companies), Civil Society Organizations, Academia, Mining Associations, Trade Unions and the Chamber of Mines among others.

The purpose of introducing the SI was necessitated by the audit of the Mining Cadastre Department which revealed various irregularities in the issuance and administration of mining rights. The audit revealed that some entities and individuals held large numbers of mining rights for speculative purposes resulting in an imbalance in the development of the mining sector by depriving credible investors of the opportunity to mine in the tenements.

This situation was exacerbated by lack of provisions in the Mines and Minerals Development Act No. 11 of 2015 (hereinafter referred to as the “Mines Act”) to restrict the number of mining rights that an individual or entity can hold. In this regard, the Ministry developed the proposed SI to address the inadequacy in the Mines Act. The implementation of the SI is expected to unlock tenements to be accessible by other credible investors in order to contribute in developing the sector to accelerate the attainment the target of 3 Million Metric tonnes of copper production per annum by 2031.

2.0   BACKGROUND

Historically, Zambia has been a major mining country for about a century, and mining has therefore remained the mainstay of its economy. At the end of 2021, the mining sector in Zambia accounted for 17.5 % of Gross Domestic Product (GDP) and 70% of export earnings.

The Ministry’s core mandate is to develop and regulate the mining sector in a sustainable manner for the benefit of the people of Zambia. The Ministry carries out its mandate through four (4) technical departments namely; Mines Development, Geological Survey, Mine Safety and Mining Cadastre. It is worth to note that regulation of the mining sector is better carried out if it is coupled with adequate legislation. This helps in monitoring and regulating the mining sector.

Previously, under the repealed Mines and Minerals Development Act No. 7 of 2008, investors were allowed to hold huge areas for exploration. This meant that most areas were not explored because some companies had no capacity to explore such huge areas and hence new players could not be come on board to explore over these areas which were already under license holders.

The enactment of the Mines Act was among others meant to free some areas for other players to participate by reducing the area sizes of the mining rights. With this measure, it was anticipated that companies that had huge areas would free excess areas for other players to participate. However, this was not the case as many big companies opted to subdivide the excess areas and created sister companies who in turn acquired mining rights to the excess areas.

The other objective of the Mines Act was to restrict the cumulative area size in for companies with multiple mining rights to a specified hectarage of land. To circumvent this measure, companies opted to form related companies in order to access additional mining rights. This has resulted in some companies holding over 50 mining rights most of which are dormant and contributed in promoting illegal mining.

Furthermore, it has been observed that mining rights have been held by individuals and entities that may not have immediate intentions to explore the minerals or indeed undertake mining activities. This situation has resulted in huge mining tenements being held by individuals or entities without any development and hence blocking other potential investors with financial capacity from investing in the mining sector.

There is need therefore, to put in place interventions that to address the challenges highlighted above and accelerate the country’s socio-economic development through increased production in the mining sector. This will also contribute towards the country’s achievement of the 3 Million Metric tonnes of copper production in the next nine (9) years as envisaged under the National Mineral Resources Development Policy of 2022.

3.0 STATEMENT OF THE PROBLEM

Over the years, there has been an imbalance between the large number of mining rights owned against the overall contribution of the mining sector to national development. This is associated with the undeveloped tenements which have not been exploited by the holders of the mining licences.

Currently, the Ministry has 3,607 valid mining rights of which an estimated 1,200 are dormant, as such blocking other individuals or potential entities with financial capacity to develop the tenements. Further, it has been observed that the underdeveloped tenements have also perpetuated illegal mining. The underdeveloped tenements have led to: imprudent environmental conservation, development and use of non-renewable mineral resources; unsatisfactory mineral resources exploitation and development which  contribute negatively to socio-economic development; compromised safety, health and environmental protection; wasteful mining practices which is counterproductive  to sustainable development; prevent citizens from  equitable access to mineral resources and benefits; and lack of contribution to the development of local communities in areas surrounded by mining rights.

This has ultimately led to lower than expected level of investment in the mining sector; lower than expected output for the sector; and inadequate contribution to economic development.

The Ministry of Mines and Minerals Development, therefore, wishes to invite stakeholders to commment on the matter. The draft regulation has been uploaded in the supporting documents section of this notice.