SHARING WEALTH FROM ESWATINI MINES

In my last article, I mentioned in passing that His Majesty the King as the iNgwenyama in trust for the emaSwati takes 25 per cent shareholding in all mines in Eswatini. Unfortunately, most of the responses focused on the 25 per cent shareholding of the King than the point I was trying to get across.

For those who might have missed my focus message, I was suggesting that emaSwati establish a government-owned global International Company maybe called Eswatini Royal Mining and Steel Company to mine and beneficiate our minerals locally and not sell them as raw materials. I suggested the mining of iron ore and coal to enhance the production of Automotive steel for the vehicle manufacturing industry around the world. The establishment of the steel industry is vital for our industrialisation. We are a tiny kingdom which should be rich.   

Poorer

I gave an example of South Korea, which was poorer than most African countries in 1965 when it started its Hyundai Motor Company, which is now a global international company, the fourth largest car manufacturer in the world through state ownership. The development of the steel industry was considered indispensable for Korea’s industrialisation, and discourse on the possibility of creating a major steel plant in the country’s postwar economic reconstruction atmosphere. The Korea Coal Corporation, also known as Korea Coal or KOCOAL, is a government-owned corporation that oversees the coal mining industry in South Korea. The company was initially formed in 1950, under the First Republic of South Korea. In 2019, the Republic of Korea’s exports and imports of minerals totalled US$542.2 billion and US$503.3 billion, respectively.

Mines and Minerals Act of 2011
This was the message I wanted to convey, but most responses were on iNgwenyama owning 25per cent. So let us talk about it. As I see it, our present laws only serve to emphasise my point that no investors are coming, we are on our own. The law on the 25 per cent is found in Section 133 (1) under State participation of The Mines and Minerals Act of  2011 (Act No.4 of 2011). (1) The iNgwenyama in trust for the Swazi Nation shall acquire 25 per cent shareholding without any monetary consideration in all large-scale mining projects for which a mining licence is granted.  

It goes further in Section 134(1) to state that the mine must pay iNgwenyama an area rent for the land. The prospective mining company must also pay royalties to Ingwenyama as per Section 132 (1) royalties which states: “The holder of a mineral right shall pay to the iNgwenyama in trust for the Swazi Nation a royalty based on the gross sale value of any mineral, or minerals obtained in operations under the mineral right and sold by the holder in the manner prescribed”. The investor must make their investment decision based on the following:

    1. 25% to iNgwenyama in trust to the nation
    2. 25% to the government
    3. 10% to local emaSwati Partners
    (Probably Royalty)
    4. Land Area Rent to iNgwenyama
    5. Royalties to iNgwenyama
    6. Normal Corporate taxes
    7. Cost of investment (as government and     
    iNgwenyama don’t contribute}
    8. Working capital

The investor is left with 40 per cent and all the work. The mining commissioner was at pains to explain to one of the investors I personally had brought that the dividends to shareholders are only declared after the initial investment has been recovered. However, the royalties and taxes are due as per all businesses in the kingdom. This is the law and in Mozambique, the Marxist government takes 50 per cent, no questions asked.  

Should King take 25% shares?
According to African culture, Swazi Culture, and the 2005 Swazi Constitution, iNgwenyama holds all the Eswatini National Land including all that is underneath (Minerals) in trust for the emaSwati. We should be thankful that the King only asks for 25 per cent according to the culture. Let me illustrate this reality in another way. Traditionally, every family should have an heir (inkhosana/indlalifa) who takes over the leadership of the family after the death of the father. Inkhosana takes over all the assets (except assets given away by the father while still alive) of his father but assumes the responsibility to look after the family just as the father would have.

In other words, he is given the family assets and home in trust for the family members. If his brother wishes to take a wife and needs emalobolo he respectfully approaches his older brother and reports the matter. The inkhosana must manage the whole ceremony including paying lama lobolo, not as a loan to him but as a gift. If a sister needs kuyolaphiswa (medical attention) he, does it. He takes lobola, for his sisters, but must provide umhlambiso and other duties. Family members report to him, and he coordinates and delegates all arrangements just like the father would. Of course, if members of the family can afford things on their own it is fine, but they still report to him.

Responsibility
In terms of our African culture, His Majesty iNgwenyama is Inkhosana of the late King Sobhuza11 and was given this great responsibility to look after not just his own royal family, but the whole nation. This he does through many chiefs across the kingdom who themselves are tinkhosana and have the same responsibility to look after the nation. Our very wise King Sobhuza had set up Tibiyo Taka Ngwane and Tinsuka to be the vehicle by which iNgwenyama could look after the nation. University scholarship for emaSwati to study internationally in the pursuit of knowledge to do many things including building the Global company I spoke about. It should be our prayer as emaSwati that His Majesty the King uses the 25 per cent shareholding wisely to bring about change for the many emaSwati who are suffering in poverty.

I do not believe that our  King is that selfish. Assisting the nation would build a royal brand like the King of Bhutan His Majesty King Jigme Khesar Namgyel Wangchuck, who is loved and known as the people’s King. The work of the government is different because emaSwati pay taxes for that service. Some of that money goes to support the work of the royal family including His Majesty the King. So it is a reasonable expectation that the 25 per cent held in trust should come back to the people via Tibiyo and Tinsuka through our father the iNgwenyama YemaSwati our King. Comment septembereswatini@gmail.com

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