MINING houses in Zimbabwe are facing a more than 10 percent increase in operating costs, driven by global inflation in fuel, steel, and reagents, as geopolitical conflicts continue to disrupt supply chains, a senior procurement executive has revealed.
By Rudairo Mapuranga
Mr Ali Nyirenda, Group Procurement Executive at Mutapa Gold Resources, told delegates at the Mine Entra Suppliers and Energy Symposium in Bulawayo that the mining industry was grappling with mounting structural, financial, and regulatory pressures that were eroding profitability.
Forex Constraints Force 100% Upfront Payments
Mr Nyirenda said foreign suppliers were demanding 100 percent upfront payments due to perceived currency instability, foreign currency shortages, and delayed payments through the auction system.
“Because of imports, the global inflation in fuel, steel, reagents, and freight impacts our businesses significantly. Of late, I am talking about more than 10 percent increases in our costs because of that inflation due to geopolitical wars,” he said.
He said the perceived weakness of the Zimbabwe Gold (ZiG) currency had led to reduced credit terms and longer lead times, as suppliers insisted on full payment before shipping critical inputs.
“The perceived US dollar and ZiG opportunity, I am saying perceived because that is what our foreign suppliers perceive, the shortage of foreign currency and the delayed payments by the RBZ actually lead to foreign suppliers requesting upfront payments,” Mr Nyirenda said.
Supply Chain Disruptions Bite
The executive said geopolitical tensions, particularly conflicts in the Gulf region, had severely affected lead times and costs for critical mining inputs.
“Believe me or not, a mine cannot run without critical elements such as explosives, process reagents, grinding media, and critical equipment components,” he said.
The impact, he said, included elevated stock-outs, high inventory holding costs, and unplanned production downtimes.
Policy Complexity, Local Capacity Gaps
Mr Nyirenda acknowledged that policy complexity remained a challenge, though he welcomed Government efforts to improve the ease of doing business.
He cited frequent changes in import-limit regimes, shifting ZIMRA duty classifications, and export retention rules as issues that had caused border delays, added costs, and increased compliance burdens.
On local content, he noted that while progress had been made, few manufacturing companies could meet mining industry specifications.
“There are certain requirements that they need upfront. Things like certification. Yes, it is a mandate. We will not run away from it because, for us to access our markets, there is that requirement of certification in terms of quality,” he said.
Infrastructure Woes: Sandawana, Jena Roads
Mr Nyirenda revealed that Mutapa Gold Resources was taking direct action to address poor road access to its operations, announcing the construction of a new all-weather road to Sandawana Mine starting in August.
“Our Sandawana Mine — that road is actually a 52-kilometre road that is very difficult to use. So what we have done is we are actually constructing a new road starting on the 1st of August. That will be a tarred, all-weather road, not a substandard road,” he said.
He added that the company was also in negotiations to rehabilitate the road to Jena Mine.
“We do not want long transit times. After a long transit, people can take advantage of it if a truck breaks down along the way,” he said.
Call for Policy Stability
Mr Nyirenda called for policy stability, the allocation of funds to support local supply development, and the leveraging of consolidated volumes to reduce costs.
“We need reliable savings. We need the allocation of our funds to deliver local supply development. That is the talk of the day — leverage consolidated volumes, policy stability, and also look at other delivery corridors because of the congestion that is happening,” he said.
Mutapa Gold Resources is Zimbabwe’s largest gold producer and recently secured a US$125 million syndicated loan from local financial institutions to expand production at Shamva and Jena mines, with the potential to generate up to US$1 billion annually in mining revenue.
