Mining audit

The case for an audit of mining operations in Zambia has been made.

This follows months of   acrimonious debate fuelled in part by the comments made by the ranking official in KCM Mr. Agarwal.

Whether taken out of context or not the comments were seemingly offensive enough for the avalanche off criticism that has now led to demonstrations, demands for audit and in some cases total nationalization of the mining industry.

The anger is understandable.

However there  is urgent need for the Mining industry to take a pro-active approach in allaying some of the out rightly false allegations of mass plunder by the mines, then address issues of taxation, service sourcing and finally the contentious issue of expatriate recruitment must also be addressed.

Clearly an impression has been created that the mines are not rendering a full account for their activities in Zambia. This is an impression that can only be erased if the industry becomes more transparent and therefore forthcoming with figures and general information about mining.

It is a fact that our mining industry has suffered periods of severe “dysfunction” and very severe hardships, especially after nationalization when years of undercapitalization did not only render the mines unprofitable but actually turned them into serious liabilities that were drawing from national coffers.

The Government was forced to divest its interest and introduce a Greenfields policy in order to inject private capital and initiative into the industry which had obvious potential but without the requisite capital to fully exploit the natural endowment.

This is a handicap that must faced fully and squarely if we are to progress in ensuring that the country creates policy initiatives that are  intended to reverse the trend where direct benefit will be realized from our resources, unlike the current circumstances where the country has little or real track of the  benefit and to whom they accrue.

There must be an admission that investors are not philanthropist, they invest because they are looking for material return from their investment. Nobody invests for social purposes, least of all international corporations which are faceless and amorphous entities that are not interested in the social aspects or social corporate responsibilities of the institutions they sponsor to operate outside the domicile countries.

Zambians must realize this reality and work towards rationalizing the need for attracting investment which realizes resources that cannot be mobilized locally.

There is need therefore that Government in concert with local business must seriously think through capital mobilization which remains the single most hindrance to domestic investment.

As we protest against KCM, we must also advance new ideas intended to help the country mobilize and marshal local resources to exploit the many resources that this country has been endowed with.

It must be remembered that the current operating mines are only a small fraction of the many resources that this country has been endowed with. How do we exploit the un-exploited resources?

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