Gov't to clamp down on hoarding of prospecting licenses
Lewanika Timothy | Friday December 20, 2024 11:18
The decision, which comes amid mounting concerns over the underutilisation of valuable mineral resources abundant in the country, seeks to ensure that licences are held by active operators committed to exploration and development. Speaking during the Future of Mining Summit report launch last Wednesday, the Minister of Minerals and Energy, Bogolo Kenewendo, said the current mineral prospecting licences system allows companies and individuals to secure prospecting licences without any immediate plans to develop the allocated areas. This practice, the minister noted, has stifled growth in the mining sector, limiting the contribution of mineral resources to the national economy.
“We have observed that many prospecting licences are being hoarded by entities that are neither conducting exploration activities nor releasing these assets for others to develop. This is unacceptable in a country endowed with such vast mineral wealth,” the minister said. In other countries, licence holders are required to demonstrate significant progress in exploration activities within a specified time frame. Failure to do so could result in the cancellation of their licences, which would then be reallocated to operators with a proven track record or serious interest in mineral development. Analysts have said the drawback of this approach has always been that mining exploration is not a quick process. By imposing rigid timelines, the government risks driving away investors who need more flexibility to operate effectively.
The mining sector will be closely watching how the proposed reforms unfold, as their implementation could significantly reshape the industry landscape in the coming years. In November 2022, government launched the mining cadastre, which is an online database of mineral resources and mining rights, designed to clamp down on speculative licences holding in the industry. Prior to that, historical and updated information about the country’s mineral resources was stored physically, slowing down the processing of mineral rights applications as officers had to manually check records. The manual system also provided a loophole for speculative concession holders, who are the bane of local mining authorities as they typically take up and hold onto licences without meaningful exploration while waiting to sell the rights forward.
While all holders of prospective licences are required by law to submit quarterly reports on their exploration activities, including budgets, the manual system had been exploited by speculative holders who hold onto rights without any meaningful activity. In the previous years, the Department of Mines reported non-reportage rates of as much as 40% by holders of prospecting licences around the country.