Industrialization Critical for Adding Value to Minerals
For Zimbabwe to benefit from its minerals, the focus must be shifted to industrialization as a key point in the value addition of the country’s minerals.
By Rudairo Mapuranga
Speakers at the Chamber of Mines of Zimbabwe Annual Mining Conference in Victoria Falls emphasized that industrialization will ensure that Zimbabwe becomes a leading nation in growth and economic recovery, greatly benefiting from its resources.
Heresy Herry from Nedbank highlighted the finite nature of mining and stressed the importance of developing value chains and sub-industries to sustain future generations.
“I think what’s crystal clear, based on the presentation by the PGM, is that mining is a finite resource. The only thing that’s going to sustain our great-grandchildren are the value chains and the sub-industries that will create their farm. But I’ve been coming here for the last six to ten years, and I’ve never seen the Minister of Industry as part of this symposium. As we talk about creating a $12 billion industry, there must be a complementary document that gets us from the $12 billion that Isabella was talking about to the $7.3 trillion. Let’s take a cue from what’s happening in India. They have no diamonds to speak of, but they’ve been able to create an industry.”
Hon. Supa Mandiwadzira elaborated on the need for industrialization and the importance of local value addition.
“I thought it was very interesting to see what we now understand and know about the platinum PGMs industry. But I think context is always important. It would have been better if they told us how much the three players made in terms of profits over the last five years, so we can understand whether the problems they are presenting are due to market depth or a lack of planning. It’s related to the question raised earlier about projections and pricing forecasts. Additionally, the industry is beginning to use greener PGM replacements, such as recycling, and there is a concern about the rise of EV vehicles, which means it’s a dying industry. The question is whether the government should take so much money from a dying industry while prices are still high.
“The industry has made a lot of money, and we know the statistics. What value chain industries have they created? They supported local suppliers for the platinum industry, but they still import from South Africa and China. Have they deliberately supported local manufacturing to replace these imports with locally produced materials? Lastly, there’s a concept of contractors reducing their costs by 10% during crises. This should work both ways: when the industry is making more money, they should also increase payments to contractors. It has to be fair.”
Trevor Barnard, CEO of Kuvimba Mining House Group, stated that the obvious strategy is to add value through the downstream processing of minerals, ensuring they are value-added before export.
“There are abundant mineral resources within Zimbabwe, and there is a growing global demand for them. We expect this demand to increase threefold by 2030 and beyond. Investment partners are willing to join us in these ventures. The obvious strategy is to add value through downstream processing of these minerals, ensuring they are value-added before being exported to the market,” Barnard said.
According to Paul Jourdan from Africa Mining Vision, Zimbabwe has the capacity to produce an industry that can sustain the SADC region.
“For Zimbabwe to benefit, industrialization should be on the country’s agenda. We need to leverage our critical minerals to improve infrastructure, including rail, road, and power, not just for mining but for our people. Fiscal linkages need improvement, and a sovereign wealth fund capturing surplus resource rents, similar to those in Norway and Kuwait, is crucial. Investing in dual knowledge is essential for forward and backward linkages. Basic exploration should be state-led, with properties auctioned for the best return. STEM skills and RDI investment are vital for achieving the big prize: industrialization through backward linkages, including capital goods, consumables, and services. Economies of scale necessitate cooperation among African countries. Stronger economies, like South Africa and Zimbabwe, with their industrial capacities, should lead, displacing foreign imports with local production.
The African or SADC green mineral strategy addresses global warming and the transition to a low-carbon economy. Our renewable energy resources, among the largest globally, can drive industrialization and improve living standards. Unconnected populations offer a leapfrogging opportunity, similar to the adoption of cellular lines over landlines. Mining and processing should integrate green minerals into global value chains while prioritizing local value chains for industrial opportunities. Local production of renewable energy equipment, like solar panels and windmills, is feasible with regional cooperation, providing economies of scale. The objective is to industrialize Africa, leveraging our green mineral endowment and renewable energy resources. We need to address greenhouse gas emissions, focusing on critical infrastructure, fiscal linkages, and localizing mining supply chains. This approach will drive our industrialization and development, ensuring a sustainable and prosperous future for Africa,” Paul Jourdan said.