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MINING SOVEREIGN WEALTH FUND CONCEPT NOTE

1.0 Introduction
Zimbabwe is endowed with over 60 minerals of economic value. The sector is achieving massive growth. The
amendments to the Mines and Minerals Act shall make it mandatory for all entities to cater for Corporate Social
Responsibility. The move to make CSR mandatory shall see communities benefit from the mineral resources the
area process. There has been a growing trendy where locals are selling their claims to foreigners thus transferring
the benefits to the foreigners. It would be prudent to have maximum threshold of ownership of mines by foreigners
say 85% leaving 15% to the locals either as community or as part of pension schemes. The events in West Africa
should be a wake-up call as resources are at the center of the political upheavals taking place. There is need for the
state to retain 10-15% ownership in all Mining taking place as this can bring about bringing ownership to the
community
2.0 Implementation
All foreign owned entities must have 5-15% stake owned by locals in the form of Pension Scheme thus letting
employees be part of the ownership. The Pension Schemes will invest in programs that will benefit employees and
communities thus complimenting Corporate Social Responsibility drive. Mining is now the biggest GDP
contributor and leaving it entirely in the hands of foreigners might pose challenges in the near foreseeable future
and by letting the other percentage owned by Pension Scheme will make sure that the Mining Sovereign Fund will
benefit the community. The resource mobilization drive will bear desired results if the employees and community is
involved. By being shareholders by virtue of being employees will ensure the wellbeing of employees and
community where mining will be taking place. The project will minimize repatriation of all the profits as the local
component will venture into projects that do have a bearing on the employees and community thus bringing long
term sustainability.
3.0 Benefits
The revival of pension schemes through awarding of shares in mining entities can help revive community
development. The Mining sovereign fund will help the CSR initiatives as the pension scheme will invest in projects
that will cater for the future well being of the employees. The Pension Scheme being paid dividends in a way that
hedges against inflation or foreign currency risks will ensure that employees future is safeguarded which is not the
case currently. The Pension Schemes can invest into such sectors like Agriculture where the revenue generated will
be easily convertible thus cater for the needs of the beneficiaries. The investments will not be easily eroded as hey
will be backed by mineral resources. The scheme ill be able to even venture into forward integration and will be
able to appoint representatives in the senior management by virtue of being shareholders thus preserving national
interests. Mineral wealth has to be invested into projects that will benefit future generations as the resources are
finite in nature. The advent of foreigners controlling all the mineral resources will be curbed through letting
employees having 5-15% stake through giving pension scheme a significant shareholding. The involvement of
employees n ownership will mitigate against abuse of the scheme by wealthy local individuals who will not be
having interests of the employees, community and their families.

Concept written by Saxon Zvina representing Skyworld Consultancy Services

Directors: S. Zvina, F.G.Chisadza