Zambia’s Gold Rush Chaos

The dispute over gold exploration rights in Kabombo area in Rufunsa, east of Lusaka town, raises concerns about the power and influence exerted by Gold Hunters over government oversight entities and gold deposits in the region.

In 2015 in the same area, a fierce land dispute erupted between Chiefs Shikabeta of Rufunsa in Lusaka Province and Chembe of Luano district in Central Province over gold deposits, with both asserting ownership of the land. Despite being in different provinces, both chiefs claimed rights to the gold-rich area, leading to tension among their subjects.

The current tension is between Gold Hunters, a private company holding small-scale mining licence number 37439-HQ-SML in Kabombo, and several local cooperatives that were also granted artisanal mining licences for the same land. This overlap has heightened the dispute between the company and the local population. 

At a government-convened meeting on Wednesday, July 08, 2024, to address local concerns about ongoing disputes, local cooperative leaders questioned why Gold Hunters, which did not attend the meeting is exerting undue influence over the mines. This decision raises further questions about the authority wielded by the company's owners.

Additionally, Chief Shikabeta's absence from the meeting prompts questions about his commitment to ensuring that his subjects benefit from the minerals. It also supports allegations from his subjects regarding his close ties with the company.

The chief was contacted to answer some questions from MakanDay, but he urged the journalist to show respect and appear before him at his palace in Rufunsa. He had initially asked for the questions, saying he would only respond later as he was on the road when contacted.

“I think we have never met each other before, and this is the first time you are talking to me on the phone. How do you expect me to answer such questions on the phone? If you have respect for me as a chief, you must come to the palace to talk, not on the phone,” he said.

The meeting, organised by Richard Mabena, District Commissioner for Rufunsa district, was attended by Alex Mapushi, Deputy Permanent Secretary of Lusaka Province, and Carthbert Kateya, a cooperative officer in the Ministry of Small and Medium Enterprise Development.

Other attendees included Bishop John Mambo, who is Senior Headman Nyampande in Chief Mpanshya, and Charles Chibulo, the chairman for Chief Mpanshya chiefdom.

Representatives of Velos Group of Companies pledged up to $20 million for a mining project, and Mosheberi Mining Limited committed over $10 million in partnership with artisanal cooperatives.

Bishop Mambo revealed that some local and central government leaders have been compromised, allowing private companies to exploit the situation with impunity.

“Gold Hunters has caused some problems. That’s where you can smell corruption. Let’s expose that. It’s for the good of the entire country,” he said. “We need to address this situation to avoid the emergence of small militias sprouting through this trade.”

A MakanDay investigation has found that although artisanal miners dominate the extraction of gold in Rufunsa, often they face exploitation from private interests, including Gold Hunters.

According to a source familiar with gold mining in Kabombo, another company was active in gold mining before the 2021 elections and was later succeeded by Gold Hunters.

The emergence of this company has drawn attention to extensive networks connected to illegal gold mining.

Allegations suggest that these networks involve politicians associated with the former ruling party, the Patriotic Front. It appears that some of these individuals have now been replaced or have established connections with officials linked to the ruling United Party for National Development.

"It appears that the same individuals (from the previous company) simply rebranded the company," the source commented.

Gold Hunters Mining Limited

The majority shareholder in the company is Somali national Abdirahman Artan Isse, holding 70% of the shares. Among the Zambian stakeholders, Chomba Shikabwali possesses 11.5% shares, Mike Simukama also holds 11.5%, and Alian Chipote has 7.3%, collectively constituting 30% of the shares.

The company, whose registration address is 3 Malila Road in Northmead, Lusaka, was established on January 27^th, 2023. Its primary activities are focused on mining non-ferrous metal ores and wholesale trading of metals and metal ores.

The MakanDay Centre for Investigative Journalism’s attempts to obtain an explanation from Gold Hunters have been unsuccessful. When company representatives met with a MakanDay journalist on July 08, they resorted to threats and intimidation, accusing the journalist of being sent by individuals opposed to Gold Hunters.

Local concerns

Adding to the complexity of mining operations is the government's directive for local cooperatives to partner with investors, aiming to benefit communities in mining areas.

According to a source in Rufunsa, some of the local cooperatives partnering with Gold Hunters were allegedly set up by the company itself. MakanDay has not independently verified this claim.

It appears that certain government officials within President Hichilema’s administration are now backing the company.

During a ceremony in Rufunsa on June 12, 2024, attended by Minister of Lusaka Province Sheal Mulyata and other senior officials, Minister of Mines Paul Kabuswe issued artisanal mining licenses to several cooperatives. Interestingly, some officials at the event were encouraging cooperatives not associated with Gold Hunters to collaborate with the company.

Artisanal miners allege that Gold Hunters wields considerable power, and continues to exploit artisanal miners for cheap labour. This contravenes government policy aimed at empowering artisanal mining through formation of cooperatives.

Mining cadastre map portal

A review of the Zambia mining cadastre map portal reveals that Gold Hunters holds a maximum of five licenses, including three small-scale exploration licenses, one small-scale processing license, and a small-scale mining license for Rufunsa.

Further inspection of the portal indicates that, besides other licences applied for and granted nine months later in March 2023, Gold Hunters applied for their mining licence on March 18, 2024, and remarkably obtained it four weeks later on April 17, 2024.

This action blatantly disregards the 90-day rule process, which mandates an Environmental Impact Assessment before the commencement of mining activities for holders of small and large-scale mining licences.

Huge contrast

In contrast, the portal shows that the state-owned Zambia Consolidated Copper Mines Investments Holding (ZCCM IH), applied for a similar licence on September 11, 2023, and only received approval nine months later on May 7, 2024.

The company has now been granted a licence to conduct explorations in an area called Kamwesha in Rufunsa, about 100 kilometers from Kabombo.

Government's silence on mining licence approval

The Ministry of Mines and Minerals Development has not responded to MakanDay's request for comment on several questions, including the expedited approval of Gold Hunters' mining licence.

ZCCM-IH's gold subsidiary, the Zambia Gold Company, founded in 2020, was established to bolster the development of Zambia's gold sector and broaden the mining portfolio of the state-owned company, which has traditionally focused on copper.

Its responsibilities include the exploration, processing, and marketing of mineral resources, with a primary objective to sell gold to the Bank of Zambia. This strategic move aims to bolster the kwacha by augmenting gold reserves.

ZCCM-IH Public Relations Officer Loisa Mbatha explained that the company intends to employ the same operational model to be used at the Kasenseli gold mine in Mwinilunga once the mine starts operations later this year.

The operational model involves collaborating with artisanal miners to facilitate safe gold mining.

Mbatha detailed ZCCM-IH's plan to partner with the Ministry of Mines to evaluate the artisanal mining sector and aid miners in forming cooperatives to obtain artisanal licences.

“This time it will be at different levels. We intend to partner with small-scale licence holders to explore and develop mines. We also intend to undertake gold aggregation from artisanal miners, which means the formalisation of the sub-sector,” she explained.

She further outlined that the fact that Zambia Gold now owns its own licences (without partnerships) will give ZCCM-IH a lot of operational leverage.

Additionally, the company aims to collaborate with the Ministry of Commerce to procure appropriate mining equipment for these cooperatives and facilitate the sale of their gold through Zambia Gold Company.

In pursuing this initiative, ZCCM-IH will encounter competition from private entities like those in Rufunsa, as well as from artisanal miners themselves, who may prioritise financial gain over safety, sometimes at the cost of their well-being or lives.