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Mines and Mining Development Minister Honourable Winston Chitando has said he is pleased that there is a positive framework for engagement between the Government and the mining industry.
It is this Framework that the Ministry of Mines put in place which has made it possible for Zimbabwe to even expect an Usd$8 billion dollars mining economy by end of 2022 a massive growth compared to about $5, billion attained last year, toward a USD$12 billion mining economy by 2023.
Speaking at the presentation of Mining survey results, Minister Chitando said,
“What is important and what I’m pleased about is that there is a framework for positive engagement between Government and industry.
“We are aware of the drivers of some of these issues which are affecting the mining industry and we need to look at how best we can go about them.
“But, of course, as usual, the chamber will come up with recommendations and, as usual, our doors are open for further engagement,” he said.
Chamber of Mines of Zimbabwe (CoMZ) president Mr Colin Chibafa said: “The key challenges we are facing are around availability of foreign currency as we are surrendering 40 percent to the Reserve Bank, so the 60 percent we are retaining is insufficient to meet our requirements.
“The second key challenge that we have seen is around power supply, availability and also recently the cost. Most miners, as you have seen from the report, are experiencing at least 6 to 12 hours of power outages.
“This is negatively impacting on the volume that we are able to produce as miners and also the cost of doing business.
“The current cost tariff that Mai has announced, which has seen a 42 percent increase in the cost of power, is unaffordable for mining companies as we cannot pass that cost onto our customers.”
Chibafa said they will continue engaging the Government to address the challenges bedevilling the mining industry to achieve the US$12 billion milestone.
In addition, Mining companies expect to create over 4 000 new jobs next year on the back of US$1 billion capital expenditure programmes in the sector, the industry’s largest representative body has said.
This projected growth represents a 9 percent increase in new formal employment from the nearly 45 000 workers employed in the sector presently, the Chamber of Mines of Zimbabwe (CoMZ) said.
Mining , is one of Zimbabwe’s key productive sectors, accounting for 73 percent of foreign direct investment into the country, 83 percent of exports, 19 percent of Government revenues, 2 percent of formal employment and 11 percent of individual incomes.
Minister Chitando in light of the industry’s significance to the economy, has steered the Second Republic, under President Mnangagwa, which in 2019, launched a US$12 billion mining economy target to be achieved by 2023.
This envisaged milestone is premised on increasing production through expansion projects, reopening of closed mines, as well as the launch of new projects.
End of this year, the mining sector is expected to have grown to a US$8 billion economy from US$5,3 billion last year and US$2,7 billion in 2018.
The report on the state of the mining industry and prospects for 2023 presented to CoMZ by an independent consultant in Harare last week, indicates the sector is overly optimistic about increasing the number of new jobs next year.
This comes after improvements in the Covid-19 situation across the globe, which has driven demand for and prices of commodities, as well as the planned expansion projects, which are expected to drive increased hiring of new workers.
According to the CoMZ report, “formal employment in the mining sector is expected to increase by 9 percent”.
CoMZ data reveals that the mining industry employs at least 45 000 people, who are registered with the National Employment Council for the mining industry.
“Analysis of survey data shows that a minimum cumulative capital expenditure of US$1 billion is expected in 2023.
“Of the capital projects, 72 percent are expected to be completed in the next 24 months,” says the report.
Unfortunately, Power shortages, high-cost structure and foreign currency shortages are some of the key constraints to production and capacity utilisation in the mining industry.
However if these constraints are addressed, CoMZ believes the mining industry has the potential to grow by an estimated 11 percent, with selected minerals such as gold improving to 45 000 tonnes from 38 200kg this year; and platinum to 16 170kg, from 15 400kg at present.
When it comes to palladium, the projected output will be 13 400kg next year, from 12 780kg; diamond production will rise to 6,3 million carats, from 5,3 million carats; while lithium output would rise by 100 percent to 100 000 tonnes.
The country’s mining sector, which is also driven by nickel, coal, chrome and palladium is anticipated to register a seven percent growth in 2023, from 5,2 percent this year.
Next year, electricity consumption in the mining industry is expected to increase by 20 percent due to expansion projects being undertaken by different mining entities.
National Development Strategy 1 (NDS1), indicates Zimbabwe will require 3 500MW of electricity to spur production in different economic sectors.
This NDS1 is the Government’s five-year economic blueprint anchoring the economy between 2021 and 2025 and it construes policies aimed at transforming Zimbabwe into an upper middle-income economy by 2030.
Zimbabwe Electricity Supply Authority is confident that the 3 500MW of electricity the country requires to power projects under NDS1 is achievable as mining and industrial sectors have submitted applications to invest in power generation aggregating to 2 300 MW.
Currently, Zimbabwe electricity consumption stands at 1 850MW.
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