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Mining Rights in Zambia MINING RIGHTS IN ZAMBIA MINING RIGHTS IN ZAMBIA Muna Ndulo LLB (Zambia) LLM (Harvard) D. Phil (Oxon) Advocate of the High Court for Zambia, Professor of Law, University of Zambia. Kenneth Kaunda Foundation Muna Ndulo, 1987 First Published 1987 by Kenneth Kaunda Foundation (Publishing and Printing Division) P. O. Box 32664, Lusaka, Zambia ISBN 9982-01-001-8 Printed in Zimbabwe by Print Holdings Dedicated to my parents Temba and Julia: They started it all. PREFACE A legal framework is required for most human endeavours, whether it be to apply justice or to establish codes of public conduct or to provide facilities for the conduct of social or economic life by regulating and thus enabling such activities to be carried out in an orderly manner. The number of these activities have proliferated considerably mostly as a result of the extraordinary industrial and social development of the world. Hence, like in all other activities legislation is required to establish rules and regulations to control mining activities. This book is an attempt to provide a detailed study of such a legal framework within which the orderly development and operations relating to the activities of mineral exploitation in Zambia are carried out. The term mining law here is used to mean those enactments which in various ways regulate the acquisition and tenure of mining rights and mining grounds, and the practice of mining-right holders. It relates primarily to the disposition of mining rights and the specific imposts that relate to the exploitation of mineral deposits. The main aspects of mining law cover such things as definition of minerals, ownership of resources, law relating to the right to mine, conditions of governing the issue and holding of mining rights, and the relationship between mineral-and surface-right holders. This is in contradiction to mining regulations, which control the method of working a mine. The term mining regulations covers a broad spectrum and includes such diverse elements as fiscal and monetary policy, labour relations, and safety measures concerning machines and people. Traditionally writers on the subject of mining law treated it as an aspect of land law. Mining activities today present novel and intricate questions that are based upon developments in technology, multiple use of mineral bearing lands, multiple methods of taxation, and techniques of leasing, financing, and operating mineral properties. While the fixed rules of land law may have provided a skeleton upon which to build, it is generally accepted that mining legislation has departed from them in order to meet the practical requirements of the miners and the mining industry. Thus a body of legal concepts has developed which is peculiar in its application to mining activities. The reader should not therefore fall into the trap of drawing too close an analogy between mining law and land law, for it could lead to erroneous solutions to mining problems. Mining law has acquired a status of its own. The principal aim of any country’s mining legislation is to encourage the orderly exploitation and development of its mineral resources and to obtain revenues for the development of its economy. To attain these objectives the mining law must help to develop a healthy atmosphere for mining. Mining capital in Zambia is to some extent private and foreign in origin, and, as is known, in general such capital is timid with regard to venturing into most developing countries.1 Thus this study makes the basic assumption that because of the absence of local sources of capital, foreign investment in the mining industry is desirable. Since investors invest to make a profit, the need of the private investor to realise a fair return on his investment is recognised, one must also bear in mind that mining investment can only take place on the basis of reasonable consistence in the long-term stabilty of operating conditions, consequently certain aspects of the mining legislation will be evaluated in terms of how it affects the flow of foreign capital. This book is based on a doctoral thesis written for Oxford University while at Trinity College, Oxford. I wish to express my gratitude to Dr. Alan Milner, Fellow of Trinity College, who supervised the writing of the thesis. His guidance was invaluable. I wish also to thank the British Council and the University of Zambia who generously granted me financial assistance to study at Oxford. In a work of this kind an obvious debt is owed to many people I interviewed or held discussions with when gathering material for this book and those who helped type the manuscript in its various stages. Throughout the period of research and writing my wife, Marjorie and the children gave me warm support and bore many lonely hours. To them I am grateful. Lastly, I wish to thank tjie publishers for their encouragement and for publishing this book, and Zambia Consolidated Copper Minea Ltd for generously subsidising the publication o’f this book. E.g. Lindlcy, Mines and Minerals, 1914. viii CONTENTS PAGE Preface vii List of Tables * List of Maps xi Table of Statutes xi Table of Cases xx Units xxviii 1. Introduction 1 2. The basis of the British South Africa Company claims to Mineral Rights in Zambia 20 3. Challenges to the British South Africa Company claims 37 4. An analysis of the British South Africa Company claims 76 5. Mining Rights Before the 1969 Mining Legislation 119 6. Ownership of Minerals and the Nature of Mining Rights after the 1969 Legislation 133 7. Domestic Participation in Mining Ventures 190 8. Mining Rights and Mineral Taxation221 Bibliography 253 LIST OF TABLES 1. Tonnages of Minerals Produced, 19782 2. World Copper Statistics, 1971 and 1978 3 3. Contribution of Mining Industry to Domestic Product, 1973 - 8 5 4. Contribution of Copper to Exports, 1973 - 8 6 5. Contribution of Mining Industry to Revenue, 1973-8 6 6. Mining Industry Labour Strength, 1970 - 8 7 7. Population Distribution According to Provinces, 1963 and 1969 8 8. Expatriate Labour Strength in Mining Industry, 1965-9 192 9. Management and Consultancy Fees paid to Roan Selection Trust Ltd., by Roan Consolidated Mines Ltd., 1970-3 215 10. Average Yearly Prices Per Long Ton of Copper, 1965-8; 1947-51 226 11. Copper Royalty Payments Compared with Ore Grades, 1968 227 12. Principal Copper Exporting Countries Production Forecasts, 1969 and 1975 231 13. Account of Mining Industry Showing Investments and Dividends, 1945 - 57 232 14. Performance of the Companies: a) Roan Consolidated Mines Ltd., 1970 - 4 242 b) Nchanga Consolidated Copper Mines Ltd., 1971-4 242 x LIST OF MAPS Map Page Map of Zambia showing Tribes, Boundary of the Copperbelt and Boundary of Barotseland. 109 TABLE OF STATUTES B Barotseland-North-Western Rhodesia Order in Council, 1899 generally 1,2, 30, 50, 59,61,62 article 6 16 article 9 94 Coal Act, 1938 (England) generally 14 Coal Industry Nationalisation Act, 1946 (England) generally 14 Companies Act, Chapter 686 of the Laws of Zambia ss. 12,14,15, and 112 213 ss. 29,90,120, 219 Constitution of Zambia, Appendix 3 of the Laws of Zambia (1965 ed.) s.18 131 Constitution of Zambia Act, 1973 s.54 159 Copper (Export Tax) Act, Chapter 669 of the Laws of Zambia generally 19,190,229 Credit Sales of Native Ordinance, 1936 generally 85 Criminal Procedure Code, Chapter 175 of the Laws of Kenya s.200 18 Criminal Procedure Code, Chapter 160 of the Laws of Zambia s.203 18 E English Law (Extent of Application) Act, Chapter 4 of the Laws of Zambia generally 16,17,19 Exchange Control Act, Chapter 593 of the Laws of Zambia generally 250 F Foreign investment Act, 1973 (Canada) Clause 2 193 Foreign Jurisdiction Act, 1890 (English) generally 93 Federation of Rhodesia and Nyasaland Order in Council, 1963 generally 2 G Gold Law No. 8 of 1885 (South Africa) generally 120 Gold Field Act, 1874 (Australia) generally 148 H High Court Act, Chapter 50 of the Laws of Zambia s.9 16 1 Immigration and Deportation Act, Chapter 122 of the Laws of Zambia ss.18, 19,20218 Income Tax Act, Chapter 668 of the Laws of Zambia generally 19 ss.5, 17 223 s.14 222 s.16 223 s.33 230 xii Income Tax (Amendment) Act, No. 26 of 1970 generally 230 ss.2(l), 19(1), 20(1), 23 230 Income Tax (Amendment) Act No. 11 of 1973 generally 19,235 Income Tax (Amendment) Act No. 10 of 1975 generally 19,235 s. 19(a) 235 s.22 236 s.23 236 Income Tax Proclamation, 1921 generally 229 Income Tax Proclamation, 1926 s.5 230 Interpretation and General Provisions Act. Chapter 2 of the Laws of Zambia s.3 17 Industrial Development Act No. 18 of 1977 generally 244 L Land Acquisition Act, Chapter 2% of the Laws of Zambia generally 163 Lands and Deeds Registry Act, Chapter 287 of the Laws of Zambia s.4 88 s.6 88 Law 16,066 (Paraquay) generally 153 M Mashonaland and Mining Regulations, No. 1, 1890 (Rhodesia) generally 121 Mines and Minerals Act, Chapter 66.01 of the Laws of Botswana s.2 133 s.7(3) 178 s.7(5) 183 s.33(1) 140, 153 ss.33(2), 34 153 Mineral Regulations, Chapter 196 of the Laws of Sierra Leone s.31 155 Mines and Minerals Act, No. 32 of 1976 generally 19, 96, 133, 175,190 ss.3(l), 3(2) 133 s.5 140 ss.6(l), 134(0, 135(1) 135 ss.10, 14 154 s.16 139 s.17 141 s.18 154,155 s.20 190,208 s.24 141 s.25 143, 171 s.26 156 xiv s.27 139, 143, 154 ss.30(1), 48(1) 143 s.31(a) 196 s.33(1) 154 s.34 141 s.35 171 s.37 156 s.39(1) 145 s.40(a) 144 s.44 139 s.45 143, 145 s.46(l)(b) 196 8.51(1) 155 s.53(1) 174 ss.53(1), (9), 79, 80 175 s.54 160 s.55 161 s.55(2) 164 s.56 166 s.60 139 ss.65, 92, 93, 94, 96 169 s.77 177, 178 s.
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