Just Politics by Aaron Ng’ambi: we need a Debswana arrangement for our mines

The unfortunate issues of Konkola Copper Mines (KCM), Mopani Copper Mines and other mines across the country still demonstrates that Zambia has failed to provide leadership and find a lasting solution in this particular sector since independence. Despite the fact that the mining sector is the largest contributor to our gross domestic product (GDP) growth, this is the same sector that has been vulnerable to political manipulation and exploitation by the powers that be. It is difficult to believe that our leaders are and have been seriously committed to making the Copperbelt and other mining provinces the hubs for economic success and development. Many times we have heard and seen our leaders say one thing and then do the opposite when it comes to our mines. This is not only applicable to the copper mines, but the emerald mines, the manganese mines, the gold mines etc. Sadly, our next-door neighbours in Botswana have long figured out how to make their mineral wealth benefit and work for the people in practical terms. And we have stood by and watched the success story of the diamond mines in Botswana for over 50 years.

Hence, 57 years since we gained independence and took control of our own destiny as a county; we remain almost clueless when it comes to managing our resources. There is no doubt in my mind that if those diamond mines of Botswana were in Zambia, there would have been stories of mismanagement of resources and corruption. But the story of diamond mines in Botswana is known for nothing but the longest public-private partnership between the South African diamond company (De Beers Consolidated) and the government of Botswana. This vibrant 50/50 joint venture or partnership of over 50 years gave birth to what we know now as Debswana. The Zambian mining industry needs a tough and tested arrangement of a public-private partnership or in other words; we need a Debswana arrangement for all of our copper mines, gold mines, emerald mines, and manganese mines countrywide.

In 1966, Botswana gained its independence from British colonial rule. A year later, the government of Botswana moved quickly and swiftly to engage experts from Canada and Scandinavian countries to help them maximise their benefits as a nation from the diamond mines. Upon recommendations from these experts, the independent government of Botswana entered into an agreement with the South African company called De Beers. This agreement enabled the Botswanan government to create or establish a company that owns 50 per cent shares in all the diamond mines in the country. To this very day, that company holds 50 per cent shares. This smart partnership and forward-thinking decision made by the founding fathers of Botswana has outlived every one of them, with far reaching consequences/benefits for the people of Botswana. To this day, no one can argue that Debswana has been the most successful models of a public-private partnerships, which has immensely benefited the people of Botswana. Debswana is responsible for 40 per cent of Botswana’s GDP growth and 70 per cent of the country’s export earnings, while producing about 30 million tonnes of diamonds per year. It is unthinkable that our leaders have never taken an interest to study Botswana’s mining achievements, and then seek to employ to our mining sector some of the things our friends have done. Any serious government would have taken advantage of this model by sending a team of experts to our neighbours in Botswana. Even though Debswana is an arrangement with diamond mines, I believe that whatever principles used to negotiate this amazing deal still applies in striking a deal for our gold mines in North Western Province or any other minerals mined across the country.

There is a general sense or mood in the country that the time for mediocrity is long gone. Most people are excited and believe that this new administration will seriously implement policies that will truly benefit the Zambian people in the mining sector, even after this generation is long gone. This is why there is a debate as to why the new dawn government has made the mineral royalty tax deductible in the present budget. The issue is not so much that the government is perhaps giving mining corporations a loophole for tax avoidance, but rather the fact that our people are even able to discuss what mineral royalty taxes are in the streets of Lusaka, in the bars of Kitwe and other forgotten places of our country is an indication in itself that our people want more and are demanding more from this new administration in the mining sector. Also, we cannot forget that the only time when Zambians felt like the mining companies were paying their fair share of taxes was the time when President Levy Mwanawasa and his then Minister of Finance, Dr. Ng’andu Magande introduced windfall tax. This was at a time when the copper prices on the international market were at their highest, which is more or less like what we are experiencing right now. It is a fact that the copper prices are currently ranging from $8,000 to $10,000 per tonne. This is a golden opportunity for the government to do the needful; re-negotiate deals with potential investors and get KCM and Mopani Copper Mines up and running like yesterday. The Debswana arrangement or something similar to it will be the best and perfect solution for our troubled mining industry.

For a very long time, I have been of the view that governments should completely stay away from running the affairs of the private sector. However, the success story of Debswana proves that it is possible to have government intervention and involvement with private entities and still have a positive experience. In the final analysis, the number one cause of failure of any public private- partnership is corruption and mismanagement of resources. The Zambia Consolidated Copper Mines (ZCCM) is no exception to this even though it gave our people a decent livelihood, hope for the future and was indeed the best thing that ever happened to the people of the Copperbelt. The mine operations under ZCCM began to fail due to mismanagement of resources, and then became vulnerable to politicians and politics of that time. In order for us to sustain a prudent public private partnership, we would need the discipline and consistency exhibited by the successful government of Botswana from their independence in 1966 right up to now with regards to Debswana. Time for real change in the mining sector is now. We do not need the “here today, and gone tomorrow investors”. Clearly, our past experiences with Anglo-American, GlenCore, Vedanta, First Quantum Mining just to mention a few, have been far from desirable. Some of these multi-lateral companies, cannot even live up to their basic social corporate responsibilities as expected. We need better investors, and not those who are here momentarily and are solely focused on profit at the expense of our people’s welfare.

Email; aaronngambi@yahoo.com

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