Despite the economic instability in Zimbabwe, which was rocked by hyperinflation between 2004 to 2009, the country’s mining industry had managed to improve output, particularly in platinum, delegates at the Zimbabwe Mining & Tax Law seminar, held in Johannesburg last month, were told.

Independent mining policy consultant Dr Paul Jordaan highlighted that mining output in Zimbabwe had improved threefold, compared with output in the colonial era, when the country was known as Rhodesia.

However, despite the improved production, Zimbabwe, or any African country with a significant mining economy, had not received genu- ine benefit from the extraction of its natural resources, he added.

Jordaan asserted that sustainability in mining was a myth and that mining could only be indirectly sustainable based on the Hartwick rule, which defines the level of investment required to produce capital goods, such as infrastructure, which can then be used to offset declining stocks of nonrenewable resources.

Mining, therefore, is sustainable only if the value of extracted resources is reinvested in infrastructure and human resources, such as education, resulting in a net benefit for a whole country.

Jordaan pointed out that, in the 1980s, Finland was a single-resource economy, focusing on wood exports, the value of which was reinvested in science, technology, engineering and mathematics (Stem) skills, as well as infrastructure, resulting in the country becoming one of the leading industrial economies today.

He highlighted that the overarching framework of Zimbabwe’s draft Mineral Policy stated that mineral resources belonged to the nation, rather than landowners, local communities or local polities, and warned against government’s promotion of community-equity measures, as it would widen the socioeconomic divide in the country, resulting in a few receiving economic benefits while the overwhelming majority did not receive any benefits.

He noted that only about 10% of Zimbabwe was mineralised and, should community equity measures become a reality, only 10% of the people would then benefit economically.

The Zimbabwe government must avoid sentiments of community ownership “at all costs” as it would lead to conflict, Jordaan warned.

To take better advantage of its mineral endowment, Zimbabwe should better employ the resource links, such as capturing and investing resource rents in long-term economic, physical and human infrastructure, which would result in improved fiscal returns, he suggested.

Further, better advantage should be taken of the available space in Zimbabwe by constructing critical infrastructure, such as road and rail networks, to help facilitate the development of other economic endeavours to further promote local economic development.

Backward links should also be made with mining inputs, such as capital goods, consumables and services, as well as exports, helping the facilitation the development and growth of both the mining industry and developing industries. Backwards linkages refer to the establishment of a new industry creating expansion possibilities for other local industries through input supplies to the new industry.