Local Foundry Sector Struggling to Raise Retooling Funds
The Zimbabwe Institute of Foundries (ZIF) says there has been little progress in raising funds for the revival of the foundry sector, as hopes were dashed after the government advised them to seek creative ways to source money from their members, Mining Zimbabwe reports.
By Ryan Chigoche
The foundry sector plays a crucial role in Zimbabwe’s industrial landscape, serving as the backbone of various industries, including mining, agriculture, and manufacturing. It provides essential components and equipment, making it vital for the country’s economic growth and development. Foundries produce a diverse range of cast components, including iron, steel, and aluminium castings, with an estimated annual production of around 40,000 tonnes.
However, the local foundry sector has recently been in a deplorable state, facing numerous challenges, including a shortage of raw materials and an unreliable power supply, both of which have affected production. Chief among these challenges is insufficient investment in modern technology and infrastructure, which limits production capacity, as many local foundries still rely on outdated methods, hindering their efficiency and competitiveness.
Late last year, ZIF Chief Operations Officer Dosman Mangisi told Mining Zimbabwe that for the sector to be fully retooled and competitive, an investment of US$100 million was required, with much of the funding expected to come from the Treasury due to the sector’s importance.
However, speaking to Mining Zimbabwe recently, Mangisi stated they have been unable to attract the desired funding, as the Ministry of Finance encouraged them to find strategic ways to raise the required funds independently.
“The progress looks positive, though it’s taking time. We were just having some discussions with the Minister of Finance recently, and they encouraged us to focus on business within the local sector, especially by tapping into medium-scale miners. This is part of our feasibility study for the foundry industry, so we can serve local industries. Once business moves in that direction, confidence in the industry will increase.”
“We are already working with financial sectors, such as banks. That’s why you see us collaborating with suppliers and miners. We need financiers because we are trying to partner with other local entities,” Mangisi added.
Zimbabwe has set an ambitious target of achieving a US$40 billion mining sector by 2030, viewing this goal as a cornerstone of the nation’s economic development aspirations. A critical component in reaching this target is the foundry sector, which provides essential components and equipment necessary for efficient and safe mining operations. Foundries play a vital role in the mining value chain, from the extraction of ore to the processing and transportation of minerals.
As one of the mining sector’s largest suppliers, foundries provide machinery and parts such as crushers, grinding mills, conveyor belts, and mining trucks. These components are crucial for ensuring the effective and safe extraction of minerals.
In addition to funding challenges, the revival of the foundry sector is stifled by competition from cheap imports. Zimbabwean manufacturers struggle to compete with lower-priced goods flooding the market, which undermines local production. There is also hesitance among authorities to protect domestic industries, as Zimbabwe operates within a global market that emphasizes trade liberalization. This lack of protective measures leaves local foundries vulnerable to foreign competition, further hindering their ability to thrive.
During his brief tenure as Minister of Mines and Mining Development, Soda Zhemu proposed levying a tax on miners to fund the retooling of the foundry sector. This initiative aims to enhance efficiencies within the foundries, enabling them to compete in the global market. Zhemu emphasized the need for innovative funding solutions for the foundry sector, hinting at a new tax on miners to provide a critical source of funding to strengthen the sector and support Zimbabwe’s broader mining industry goals.
Foundries play a pivotal role in Zimbabwe’s mining sector, significantly contributing to the country’s economic landscape. By transforming raw ores into usable metal products, foundries facilitate the processing of various metals extracted from mines. This not only supports local industries but also enhances Zimbabwe’s position in the global market, as processed metals are essential for both domestic use and export.
In addition, local foundries reduce the mining sector’s dependency on imported components, which are often costly and subject to logistical challenges. By manufacturing machinery parts, tools, and other essential components locally, foundries promote supply chain efficiency, minimizing downtime for mining operations. This localized production streamlines the supply chain, allowing mining companies to operate more effectively and respond quickly to maintenance needs.