By Victor Bhoroma
The paradox of resource abundance typically explains the case of black granite mining in Mutoko, Mashonaland East Province of Zimbabwe. The area is home to the best black granite rock highly demanded in South America, United States and Europe. Black granite is polished and used in construction to make tiles, tombstones, interior pavers, counter tops and elegant exterior designs.
The rock has been mined in certain parts of Zimbabwe since 1972 with Murehwa, Mutoko, Uzumba and Mount Darwin standing out amongst the worst affected areas. One of the prominent architecture made from Black Granite mined in Mutoko is the $82 million Royal Danish Library in Copenhagen, Denmark.
The 21 500m2 library was designed with an external façade of 75kg granite stone polished and supplied by an Italian company at a cost of $9.12 million in 2009. The mining companies that extracted the stone paid the Mutoko Rural District Council tax royalties of less than $45 000 in total at a rate of $1 per ton and supplied the Italian designers at $600 per square meter slice before polishing.
The disparities in terms of taxes paid to government through the local authority which in turn benefits the local community and what the miners receive in terms of export earnings is huge. To make matters worse, the Mutoko RDC is owed over $10 million in unpaid taxes by granite mining companies. It is estimated that over 150 000 metric tonnes of granite are mined in Mutoko per year with over 95% of it exported to Europe and America. Massive revenue loopholes also exist as the authorities do not weigh produced stone.
Close to 50 years of granite mining in Mutoko and surrounding areas has left the communities that produce the black granite with scars of massive land degradation, pollution of all forms, and poverty.
Tremors from rock blasting also has a fair share of cracks on nearby houses just as much as the Harare-Nyamapanda road which carries the weight of 30 ton trucks ferrying the special rock into the market. Agricultural land is being transformed into deadly dungeons and dumping sites. Environmental damage has reached alarming levels, while the mining companies take the cheaper route of paying Environmental Management Agency (EMA) fines than incur the exorbitant cost of environmental rehabilitation.
There have been numerous reports of children drowning in water filled pits and livestock deaths from the Nyamuzuwe area in Mutoko. Besides the existence of the Mines and Minerals Act and the EMA Act Chapter 20:27 which compels mining companies to produce Environmental Management Plans which include impact environmental impact assessments and mitigation measures, the damage continues unabated to this day.
The Mutoko RDC has been contemplating hiking tax royalties to $3 per ton since last year but that still will not compensate for the land degradation and various scars that granite mining leaves in the area.
Granite mining, like any other economic activity in the country produces negative externalities to the environment and community. However it also brings investment in the country and provides employment to the community apart from the various corporate social responsibility initiatives that are undertaken by the mining companies.
What is important is for the government to ensure that revenue leakages are controlled by way of constructing weigh bridges to measure the actual weight of the mined stone at strategic points and give incentives such as future tax holidays to the miners so that they add value to the stone locally before exporting it.
Tax royalties charged on black granite exports per ton should also align to other local minerals that fetch the same value on the world market or be charged in foreign currency as indexed by the miners to foreign buyers. Mining companies need to contribute their fair share to infrastructure upgrades and maintenance in the areas they mine like all other miners in the country. The EMA statute should force the miners to abide by their submitted environmental management plans instead of paying little fines that have no impact to the viability of the mining activities.
The consequences of not complying with EMA statutes should be punitive enough to force the miners to rehabilitate the environment they damage. If the above is implemented, all the stakeholders will realize the benefits of black granite mining that has cast a shadow of a curse of abundance on the communities that deserve to benefit from the resource endowment.
Victor Bhoroma is business and economic analyst with expertise in business management aspects. He is a marketer by profession and holds an MBA from the University of Zimbabwe (UZ).