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With the political sea-change which occurred in Zimbabwe in November 2017 much attention has been focused on the potential for the development of the mining industry there and its contribution to a resurgent economy. Both the current situation and that potential was the subject of the Zimbabwe Mining Investment Conference held in Harare on 27-28 February. The impressive attendance - in excess of 300 delegates - spoke volumes about the interest in the industry.

The principal focus of the conference was the urgent need to secure funds from both local and international investment constituencies to prime the re-energisation of the industry. Exploration activity has been starved of capital for more than a decade. Many operating projects remain on care and maintenance. Key to securing those funds though is the need for the government, under the initiative of President Emmerson Mnangagwa and Mines & Mining Development Minister Winston Chitando, to ensure radical change in the local regulatory and financial environment. Several plans to address the same were announced and discussed at the conference.

A frequent theme and complaint from those already operating in Zimbabwe is the difficulty in navigating the bureaucracy of government, particularly in the light of the multiple (and disjointed) departments involved. One such operating company cited the need to consider and deal with 35 Acts of Parliament, 45 Statutory Instruments and 15 Ministries. Accepted wisdom from those advising countries in connection with the development of mining industries is that a single point of contact within government for regulation of the industry is the optimal model.

Several government panelists pointed to the change which is already occurring. The announced Rapid Results Approach and Whole of Government Approach initiatives were designed to both eliminate bottlenecks as well as ensure a coordinated approach to regulation by multiple Ministries (although the former was apparently first announced in 2014 so there is clearly room for improvement). For the first time though senior government officials acknowledged the need for real change.

Government representatives also announced a review of taxes applicable to mining companies. Vocal criticism was heard about the current regime - for instance the beneficiation tax of 5% imposed on lithium producers who do not process onshore. Beneficiation tax as a whole is to be re-assessed generally with the aim of introducing a new regime by January 2019. The royalty regime is also to be reviewed with a view to introducing a sliding scale which would encourage on-shore beneficiation. It I s clear that the aggregate tax take from the industry is something which is in significant need of review and reform. Again, competitiveness with other mining jurisdictions will be the key factor.

The need to update the principal mining law was also noted. That law has been in place since the 1960s and is in urgent need of reform to bring the same to a standard which is internationally competitive. Bills to amend the law have been mooted and placed before Parliament for in excess of 20 years but nothing of substance has been achieved. The need to rationalise the differing interests of surface right and mining right holders has been mentioned as something which is in particular need of attention. Ministers at the conference were confident that amendments would be implemented within months. Public procurement reforms were also in course of being brought into effect. Finally the much criticised indigenisation plans were to be scaled back to be only applicable to PGM and diamond producers.

One area where government initiative and reform is clearly needed if investment is to increase is currency availability and liquidity and the ability to move and hold foreign currency earnings offshore. Little by way of substantive proposals to address this issue were heard at the conference. Zimbabwe is clearly in need of foreign currency and the mining industry should be well positioned to provide the same but investors and sponsors need comfort that, after settlement of local liabilities, any foreign currency should be free of restriction. 62% of foreign currency in Zimbabwe currently comes from exports. Some of the remainder comes from offshore investment but by way of evidence of the ground to be made up $300 million of offshore investment came into the industry in Zimbabwe in 2017. The comparable numbers for Mozambique and Zambia were $2 billion and in excess of $1 billion, respectively.

In short, while the mood music at the Harare conference was positive, particularly around commitments to change being announced by the government representatives present, solid evidence of change is going to be required before a real change in investor sentiment is forthcoming. It could well be though that this solid evidence will arrive more quickly than some expect. As one speaker in Harare observed Zimbabwe is too rich to be poor. Rapid improvement in government regulation will go a long way to ensuring that observation is addressed.