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TheStreet Open House

Illegal Manganese Mining In Zambia

By Robert Young — Exlcusive to Manganese Investing News 

Illegal Manganese Mining In Zambia

While most countries embrace the mining activity within their borders, the Ministry of Mines and Natural Resources in Zambia has a different situation to deal with when it comes to manganese production. In October of last year, the government suspended the issuance of mining licences and non-mining rights due to irregularities, litigations, and allegations bordering on corruption in company processes. But that suspension has not stopped companies from continuing the production of manganese. Now, according to some reports, the government is losing millions of kwacha (the currency in Zambia since 1968) in revenue through illegal manganese mining.

In February, Richard Musukwa, the Deputy Minister of the Ministry of Mines, said in an interview that the government has lost more than K3.2 billion in revenue from the suspension of mining licences and non-mining rights.

Musukwa also stated that lifting suspensions by the end of March would be in the best interest of the government, and assured the cooperating partners and mining companies that everything was being done to speed up the process. By the end of March, the revenue lost since the suspension could be much more than the K3.2 billion estimated.

For the last twelve months, the price of manganese has struggled to maintain its average of $2,868.75 per ton. Manganese flake prices have fallen considerably since last March's price of $3,600 per ton to the recent price of $2,850 per ton, and with the issue of licencing and legalities hovering over the metal, pressure is still evident.

In another interview, Brighton Mbaimbai, the Town Clerk for Mansa, disclosed the fact that his government is losing millions. Mbaimbai would not commit to an actual financial amount, but did say the situation was due to the failure of manganese extraction firms to formalize their operations with the proper authorities. Local authorities have made attempts to appeal to the Ministry of Mines and Natural Resources to help curb the issue and to compel mining firms in the region to start paying taxes.

Mbaimbai also claimed that seven mining companies have been issued large-scale mining licences, but have not formalized their operations with the council with respect to paying the appropriate taxes.

“These mining companies are currently mining without leaving anything for the Government and the council. This is so because the mines are not appearing anywhere in our valuation roll and deeds records, although some of the mining firm's activities are legal.” Mbaimbai named Genesis, Taurian, Tycoon, and Amanita as part of the seven illegal operations.

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