JOHANNESBURG (miningweekly.com) – Zambia is strengthening transparency and accountability to make sure that natural resources improve the lives of all of its citizens.

It gives easy visibility to the level of natural resource wealth shared with the governments of host countries, with data published online for everyone to access.

It falls within the Zambia Extractive Industries Transparency Initiative (ZEITI), which in turn is based on the global EITI, the mission of which is to improve openness.

The instrument that it is using is called the ‘G-Factor for Natural Resources’, with the ‘G’ standing for words including government, governance and good practice.

What is now exciting about the G-Factor is that it highlights – very accessibly – the value that transparency and accountability bring to the everyday person living in a rural community and the extent to which the mine down the road is not only creating value in that community, but also value for the country.

Already Mozambique, the Democratic Republic of Congo and Nigeria have expressed interest in emulating it.

Being targeted is a nigh-automated online repository on the ZEITI website.

It moves away from documents of hundreds of pages and reports on a one-pager that provides statistics at a glance.

Last year, Zambia became the first country in Africa to publish ‘G-Factor’ data, the figures from which highlight the contrasting contributions that a mining company can make to its host country depending on the prevailing operating and market conditions.

Typically, the G-Factor is expressed as a percentage for each operating subsidiary engaged primarily in the extraction and sale of natural resources.

Plans are afoot to showcase the G-Factor during Zambia’s upcoming EITI validation in October.

“Already optics indicate that it's the G-Factor metric that is going to give us a bonus rating during that validation,” ZEITI national coordinator Ian Mwiinga told Mining Weekly in a Zoom interview. (Also watch attached Creamer Media video.)

In its simplest form, it shows how much value accrues to the community and to the government, an indicator of the percentage of a natural resource company’s revenue that is paid to the host country’s government in primary and direct taxes, plus where the host government is a shareholder and receives dividends.

It is also an indicator of the efficiency of natural resources companies in converting those natural resources into funds for the host government.

The initial focus was on emeralds, which are mined in Zambia by Kagem, the mine run by the Johannesburg Stock Exchange- and the London AIM-listed Gemfields headed by CEO Sean Gilbertson.

“Kagem was our first port of call,” Mwiinga revealed, but the methodology has now spread to other mining companies that are not in the gemstone business.

“If you go to our website, which is zambiaeiti.org, you’ll find the G-Factor metric and we’re excited to continue building on that going forward,” he added.

The system is a mirror of value from resources. 

"Remember in the communities, the analysis is that we have a mine, therefore we need a hospital, we need a clinic, we need the road. But with the G-Factor, you are able to demonstrate, in a very concrete way, what value is left in the community, and what value goes to the national coffers.

“What is even more interesting is that it's a one-pager kind of analysis. You don't need a 300-page document with various permutations. It's straightforward, and you can actually do it on the back of your palm or an envelope,” Mwiinga pointed out.

Mining Weekly: Are there any plans to roll out the G-Factor beyond the mining sector?

Well, why not? I mean resources allowing, this is a metric that is very flexible.

What advice would you give other countries when it comes to adopting and rolling out the G-Factor and enabling transparency?

My advice is, get on with it.

Are you open to other countries contacting you to benefit from your pioneering experience?

I must mention here that we are speaking already with our colleagues in Mozambique that are also interested in this space. Our colleagues in DRC have also expressed interest, as well as our colleagues in Nigeria, so we’re very open to making this metric very popular.