Lusaka accountant proposes 50/50 stake in gold mines

Lusaka-based chartered accountant Victor Nyasulu says the discovery of gold deposits in some parts of the country can help get Zambia out of its current debt situation if well managed.

And Nyasulu has proposed an equal shareholding in gold mines to allow greater benefits for the local people.

Recent exploration works have discovered deposits of gold in Mwinilunga district of North Western Province, Rufunsa in Lusaka, and Petauke in Eastern Province, among other places.

Nyasulu told News Diggers in an interview that the discovery of gold in Zambia posed a grand opportunity for the country to revamp its economy.

“It seems God has given us another opportunity. Gold seems to be making a resurgence as a reserve commodity and if well managed, this discovery of gold can be utilized in a big way so that we can mitigate and even get the country out of the current debt crisis. When government sent troops to protect the gold area in Mwinilunga, the President emphasised the need to look for a credible investor [to invest in the gold reserves]. But my problem with that view is that investor in Zambia has come to mean foreigners by and large. But I thought this was an opportunity to actually use the same gold as a basis upon which we can get a bigger and more profitable stake in the mining sector,” Nyasulu said.

“Gold is three times in value as much as copper, so this is a God-sent opportunity, it’s like God is saying ‘whatever I give you, you don’t seem to make use of it properly’. This is a copper country but it’s filled with poverty stricken Zambians. So in his usual grace, God has made us see what he put here, gold. So let’s use this opportunity to actually use this gold to our advantage. We don’t need foreign investors, at least not for them to have a bigger stake. At the moment, ZCCM’s maximum stake in any of the big mines is 20 per cent. But what we are saying is that let’s not have that kind of stake in gold. Let’s have as a minimum of 50:50. The foreigner has the money and then Zambia has the land and the resource. So there is no need to favour foreigners in this situation. So government must use this gold mining to try and mitigate and also get the country out of its debt position to ensure that we begin to get something that makes sense for Zambia.”

He said it was unacceptable for the country to be struggling in the midst abundant natural resources even after 55 years of independence.

“It’s like there is no clue as to how to turn this gold opportunity into a country that is economically empowered, not measured by how many malls there are but economically empowered measured by a country that pays for its health bill in full and a country that has water and sanitation running for the poorest of the poor. We have the resource already, so what I am talking about is restructuring of the shareholding in such a way that the majority as a minimum should stand at 50:50. So what I have in mind for Zambia is Zambian companies, individual cooperatives in the areas where the resource is. You could have a royal establishment foundation that has a stake, you could have businesses from Lusaka and from the line of rail coming together and having a stake. But at the end of the day, I am just refusing that we should be having a minority stake in the assets that are wasting. Even copper is a wasting asset, if you mine it all, God is not going to give you more,” said Nyasulu.

“So because that’s the nature of mining, we must make sure as a country that we maximise what we get out of the mines. If we don’t have a plan on maximising, we must not rush to get credible investors. We must leave in the ground so that our children’s children, if ever they get a better idea of how to mine profitably, they are the ones who should be mining. For us, let’s just be trading because if we mine all the gold and copper and we have a bad structure that doesn’t give us enough impact fees, we might as well not mine. I am not against foreign investors. I am for a win win arrangement, it works. It has for China which 20 years ago was a developing country. Today, China is the new economic power of the world. One of the things that has worked for China is that all the deals that matter have been 50:50.”




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