Zambia Looks for Mining Sector Transparency and Resource Nationalism Balance

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Countries with resource mining sectors are watching each other's moves to extract the maximum benefit from the companies, often foreign-based, that operate the mines. This is generally known as "resource nationalism."

As an African company that has renewed mining potential, Zambia has been at the forefront of countries developing a new profile for mining operations. The government is working on a legal framework that will compel all mining companies operating in the country to disclose to the government their production capacities and all material payments they make.

Yamfwa Mukanga, Zambia's Mines, Energy and Water Development minister, said the government would develop a legal framework to promote transparency and accountability in the mining sector, reports the Times of Zambia.

The legal framework also will encompass small-scale copper and gemstone miners, who will be required to disclose their production proceeds and payments annually.

The minister also announced Zambia's compliance to the Extractive Industries Transparency Initiative (EITI), having fulfilled all requirements. This made Zambia the 15th country with EITI status and the first in Eastern and Southern Africa.

The government, chamber of mines of Zambia, and civil society organizations signed a memorandum of understanding under EITI to disclose and publish all material payments they make to the government, and the state to disclose all payments they receive from the mining company. He also recommended that Zambia EITI council considers expanding the EITI cope by including other sectors such as forestry and fisheries.

EITI compliance would improve governance, revenue collection and provide a deterrent against corruption and would promote transparency and accountability, said the minister.

These moves could be seen as introducing an era of stability and certainty into the sector, and not a one-sided attempt to cream profits with no quid pro quo by the government.

For related information, see July 13, 2012, article - Fraud and Corruption Enters Top 10 Mining Risks, with Resource Nationalism at No. 1.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.