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    Monday, 20 May 2019

    Gwanda share ownership schemes face collapse

    Gwanda CSOT CEO Coaster Nkala.


    GWANDA -
    The Gwanda Community Share Ownership Trust (CSOT) faces a bleak future after Government’s 2018 monetary policy gave mining companies the right to own 100% shares in mining ventures except where diamonds and platinum are involved.
    Gwanda is rich in gold and most of its mines are involved in extracting the precious mineral.
    Speaking at the Zimbabwe Environmental Law Association (ZELA) workshop last week, Gwanda Community share Ownership Trust Chief Executive Officer, Coaster Nkala said the new Policy under the new dispensation makes it difficult to claim shares or shares on profits from mining companies.
    He said it was now more difficult to push miners who had made pledges to pay up under the share ownership scheme. He argued that the new policy shields mining companies against indigenisation or even developing the areas from which they are extracting minerals.
    Under the share ownership schemes companies are obliged to pay 10% of their profits to their area of operation The CSOTs were introduced by the Government of former President Mugabe in 2007 as a way  of empowering local communities where minerals are extracted.
    The Indigenous and Empowerment Act chapter 14:33 aims to intervene and restore to rural communities the expropriated natural resources while guaranteeing equitable share in their nation’s economic wealth and prosperity as locals enjoy proceeds of the mining operations in their areas.
    Nkala said the new policy compounds the problems that have been there where miners are reluctant to pay for community shares.
    He said Vhumbachikwe had never paid anything to the Gwanda CSOT despite the fact that they are extracting gold in the area. He said that the new mining policy will make it difficult to make them pay, let alone approach them for such payment.
    Nkala also said Blanket Mine which mines gold donated $1m to the CSOT in 2012 and gave the Trust $4m advance dividend and the arrangement has ensured that the company may not pay anything to the CSOT for the next 15 years.
    “Blanket mine donated $1m and gave the Trust $4m advance dividend. For the past five years they have been declaring $200k profit per year therefore they are not paying anything maybe for the next 15 years until we finish paying the advance dividend that also has interests.
    Blanket general manager, Kwadini Mangezi said he does not talk to the Press and any information about the company is found on the website.
    “Portland Pretoria Cement donated $1,5m. They also issued us with a vendor loan which we used to buy shares from them and we still owe PPC.
    “PPC issued us with 5%  dividend and the other 5% they gave to Umguza CSOT after arguing that they have their mining operations in Gwanda but their plant is in Bulawayo. Each time they give us dividend they take 80% of the 5% on the basis of the vendor loan they gave us. We therefore only get 20% dividend.
    “They have not been consistent in the last five years as they they have declared dividend just two times. Vhumbachikwe completely refuse to pay anything,” said Nkala.
    PPC spokesperson could not be reached for a comment.
    “Farvic Mine pledged $130 000 but has only given us $30 000. Jersey Mine pledged 500 000 and only paid 250 000. This then gives us a total of $6,780 000 received from donations and advance dividends,” said Nkala.
    Stakeholders at the meeting raised concern with mines that siphon finite resource and yet do nothing to develop the area. They said minerals will be exhausted and all that communities will remain with are huge mountains of waste left behind by the mining companies.
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