“It’s no secret that many countries in Africa are perceived as doing the wrong things” said Rudolph De Bruin, Founding Partner of the private-equity fund AMED Funds, “and some of the main players in DRC have difficulty explaining certain issues to their shareholders.” However, “with good rewards come higher risks. DRC still has the better mineral deposits. DRC is still elephant country if you want to find big elephants.” – “THE COST OF DOING BUSINESS IN THE DRC HAS TO BE ADDRESSED” – DIGITAL DRC MINING WEEK, DAY 1 HIGHLIGHTS – 2020 DRC MINING WEEK
It is no secret that mining in Africa has for the longest time been viewed by ‘big capital’ as an uncertain adventure. Most investors who dare to venture, take an astute approach to assess whether or not investing in a country’s mining sector is worth the risks associated with uncertainty. This approach includes assessing the regulatory framework around mining in the country and any associated political risk.
Fortunately for Zambia, mining adventures are governed by a piece of legislation that was enshrined into law in 2015. The Mines and Minerals Act, which was assented to on the 14th of August of that year, revised the law relating to the exploration for, mining, and processing of, minerals. In addition, it provided for the safety, health, and environmental protection of all those involved in mining operations with a bonus provision for recourse in the event of disputes through a Mining Appeals Tribunal.
Under the prohibition of exploration, mining, or mineral processing without licence or environmental impact assessment Clause 12 (1), it states that “a person shall not explore for minerals or carry on mining operations, mineral processing operations or gold panning except under the authority of a mining right, mineral processing licence or gold panning certificate granted under this Act”.
With the years of experience that ZCCM IH has had in a sector in which they have a portfolio of companies, it was only prudent for Government as a key stakeholder to entrust the very entity that they have propped up for many years with the mandate of overseeing the golden ambitions. ZCCM IH’s pedigree in mining ensures that not only are the mining regulatory requirements adhered to but also the environmental impact regulatory requirements adhered to as they seek to develop artisanal miners into junior miners who will eventually become important players in the gold mining value chain.
When investment entities such as ZCCM IH enter into contracts or agreements that seek to create value for the parties involved, there are clauses in contracts that are often never discussed such as how issues of conflict or disagreement during the tenure of the contract or agreement will be dealt with.
Under Clause 56 of the ACT, Arbitration of disputes that may arise for players in the mining sector are clearly explained. Clause 57 further discloses how the holder of a mining right or mineral processing licence can seek recourse for damages or seek compensations in the event of their rights being disturbed. These are the sort of clauses that astute investors seek out to ensure that their adventure into gold mining is protected.