Cheap imports killing local industry
Mining equipment suppliers in Zimbabwe are facing serious viability challenges stemming from currency volatility, cheap imports among others.
By Dumisani Nyoni
Mining equipment suppliers are some of the most important key players driving the mining sector, which is one of the country’s foreign currency earners.
However, the players in the industry revealed that they were struggling to make ends meet due to challenges such as currency volatility, cheap imports from China, and forex shortages to import raw material.
Their situation is more compounded by the outbreak of COVID-19 which has disrupted the supply chain.
“We are facing a serious challenge of forex to import the raw materials. The other issue also is about pricing. There is a lot of currency instability in this country, making long-term planning very difficult. Also, pricing has not been consistent,” General Beltings general manager Joseph Gunda said.
General Beltings manufactures and distributes general-purpose and specialised reinforced conveyor beltings for small scale miners.
The company is also facing challenges of cheap imports coming through the country’s porous borders.
Gunda hoped that the newly introduced forex auction system will help stabilise the local currency and eliminate the major macro-economic distortions in the economy such as the exchange rate.
The authorities recently abandoned the fixed exchange rate and adopted the forex auction system in a bid to stabilise the local currency.
Another equipment supplier, Yagden Engineering managing director Wayne Williams said the government should intervene to save the local companies from closing shops.
Yagden Engineering deals with steel fabrication, mining equipment, machining, and milling equipment.
“Chinese are bringing in substandard equipment into the country and this is a serious concern…I think there must be higher duties on equipment supplied by the Chinese,” he said.
“Our job is to support Zimbabweans. The future of our country are the children of Zimbabwe, we need to train people today for tomorrow. So much is imported from China and Zimbabweans are suffering in the manufacturing industry and it is very sad to see (that happening),” Williams said.
“We used to survive without Chinese products, making everything in Zimbabwe. It’s very sad to see how many businesses have closed and how many people are out of work because of cheap products flooding the market. Zimbabweans are the future of our country Zimbabweans no one else.
Shepco Industrial Supplies, a division of Shepco Group, recently pleaded with the government to support it in terms of raw materials so that it could boost small-scale miners’ production.
The company manufactures mining equipment such as locomotives, underground loaders, hoists, headgears among others, for large and small scale miners.
But due to the shortage of steel in the country, the company is struggling to make some of this equipment.
Ziscosteel, once the largest employer in the country, collapsed due to government bungling, looting, corruption, and mismanagement.
This article first appeared in the Mining Zimbabwe Magazine July 2020 issue