Zvishavane Community Share Ownership Trust: What You Need To Know
Communities have a constitutional right to benefit from resources in their areas in line with Section 13 (4) on National Development. Given government’s inclination to open Zimbabwe for business, there is an ominous risk that investors get prioritised over community rights is ominous. In March 2019, the Minister of Finance, Prof Mthuli Ncube boasted that government has so far sealed US$8 billion deals in the mining sector. But the exact connection between mining mega deals and benefits accruable to communities are not clear. The mining deals are not open for public scrutiny despite the constitutional requirement that Parliament must play and oversight role during negotiation of mining agreements together with performance monitoring of existing mining contracts — Section 315 (2) ©.
What is clear is that the Finance Act of 2018 destroyed the legal backing of Community Share Ownership Trusts (CSOTs) for all mineral sectors apart from diamond and platinum. Under the indigenisation framework of 2010, foreign companies in the mining sector were required to cede 10% equities to communities. Government has expressed intentions to remove platinum and diamond sectors from complying with indigenisation requirements.
Below are the facts and figures on Zvishavane Community Share Ownership Trust (ZCSOT) which communities affected by mining operations and interested parties must know. The below facts and figures were compiled during a workshop organised by the Zimbabwe Environmental Law Association (ZELA) in Zvishavane on 10 and 11 May 2019. The purpose of the workshop was to help communities with skills to follow mineral revenue to strengthen linkages between mining and local economic and social development.
- ZCSOT was launched in 2012
- ZCSOT has no share ownership in any of the mining companies that are operating in Zvishavane.
- Initially, Mimosa platinum mine pledged to give ZCSOT US$10 million
- Because Mimosa mine also has claims in Mberengwa district, $3 million was given to Mberengwa CSOT and ZCSOT received $7 million.
- The size of Mimosa’s platinum claims in Zvishavane and Mberengwa was used to allocate the $10 million pledged by Mimosa.
- Murowa diamonds initially pledged US$1 million to ZCSOT
- Later, the US$1 million pledge by Murowa was split equally between Zvishavane and Chivi district and the formula used to split the pledge was not clear.
- Murowa diamonds paid $300,000 to ZCSOT and $200,000 is outstanding.
- Unki platinum mine operating in Tongogara has platinum claims in Tongogara and Zvishavane districts. However, the $10 million pledged and paid to Tongogara CSOT by Unki mine was not shared with Zvishavane CSOT. Yet ZCSOT shared amounts pledged with other districts because of contiguous mineral deposits.
- The current balance in ZCSOT coffers is RTGS$3.5 million. Sadly, mining is the lead foreign currency earner in Zimbabwe but fiscal linkages are backed by a weaker local currency — RTGS$.
- ZCSOT’s footprint concerning infrastructure development, schools and clinics is visible in all 19 wards in Runde rural district.
- Resettlement areas which have huge infrastructure deficits are the main beneficiaries of investments undertaken by ZCSOT. This is in line with constitutional principles of public financial management which requires that resources must be allocated for the benefit of marginalised areas and marginalised groups
- $5,000 was allocated to each ward to cater for their development priorities. Some wards have failed to spend the money that was allocated to them.
- ZCSOT was not affected by the softening of the indigenisation framework in 2018 by the Finance Act. All mineral sectors are no longer required to comply with indigenisation requirements apart from diamond and platinum sectors. Zvishavane has diamond and platinum mines.
- The future of ZCSOT is uncertain. The Finance Minister, Prof Mthuli Ncube opined that government will soon introduce measures to remove platinum and diamond sectors from complying with indigenisation framework.
- To ensure sustainability, ZCSOT is now focusing on community enterprise development for income generation.