EMASWATI SHOULD BE GETTING MORE FROM MINING - LONKHOKHELA

MBABANE - Has the country been shortchanged over the years as far as revenue collected from the mining sector is concerned? This is a question that begs an answer, following the personal view of Minister for Natural Resources and Energy Prince Lonkhokhela to the fact that the Kingdom of Eswatini should be getting more than what it is currently collecting.
The minister said this during an interview with this publication, where he unpacked the proposed plan by government to establish its own mining company.

The plan is contained in the Eswatini Government Programme of Action (PoA) 2024/2025 to 2028/2029, which was made public in December last year. During the interview, the minister was asked whether the country, through the establishment of its own company, has the potential to generate significant revenue from the mining sector and he responded in the affirmative.
He said the revenue, he believes the country deserves, is worth billions per year. “In mining, we can generate E10 billion per year.

Proper

‘‘This figure is far less than what we are getting now. That is why we need to put up a proper structure,” he said. He then shared how exactly government plans to establish the company and said it will be similar to how a private company can do same for profit purposes. “This one will be done by government in its terms and through a structure that will be created. For example, government may need to buy machinery and expertise plus find markets. Government may approach companies that have, for example, machinery, to dig the resources for it,” he said. He said in many countries anywhere in the world, there are instances where mining companies dig up the resources and sell to companies they have relations with at low prices. “I am not specifically referring to the situation in the country, but I am saying in many instances in the mining sector and others.

Sold

For example, a company has to declare that it has sold to Japan Company X, only to find that the same company belongs to that same investor or he has relations of some sort with it,” said the minister. He said there are different structures in countries when it comes to the operations in the mineral and other sectors. The minister made reference to what is known as forward selling, saying it a company can pledge to supply a client for the next 20 years or whatever period and the payment is made prior.
sugar

“It is a practice everywhere. Even in the sugar industry, the sugar was paid for a long time ago. What I am saying is that government will do its own structure, I will not say it now. We want to choose the most efficient structure for government. This will be one where government will not need to pump in the money itself because it does not have money. At the end of the day, you will not be beaten in terms of pricing. The quantities that you take out from the mine will be the same quantities that will be sold”.

Mining

Without specifically referring to the Eswatini mining sector, the minister said there are high chances that a company can mine whatever product, gets 2 000 tonnes, only to declare that they got only 5 000. Such a scenario, he said, can happen in Eswatini because as a small country it does not have the expertise to even quantify or measure how much exactly of the product was mined. He said government has its own mining company, chances of being shortchanged will be minimal and emaSwati will get the maximum benefits.

Revenue

“Right now if you look at how much a government gets in terms of revenue from the mining sector, it is not impressive. It does not commensurate what it is supposed to because had that been the case, these companies would not exist. Had the meagre revenue received by government been the true picture, no mining company would exist,” he said.







 

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