Local Mining Suppliers Urged to Step Up and Support Sector Amid Geopolitical Shifts
As the global mining landscape continues to evolve amid geopolitical shifts, local suppliers facing increasing pressure have been urged to enhance their capabilities and remain competitive in order to support the local mining sector.
By Ryan Chigoche
These issues dominated discussions at the Mine Entra suppliers forum, held under the theme “Maximizing Contribution to the Mining Industry Through Local Content.”
This comes after the Chamber of Mines Zimbabwe revealed that the local manufacturing sector contributes just 15% to the mining sector from the US$2.1 billion being spent on suppliers.
At the recent MineEntra 2024 conference, Pfungwa Kunaka, the Permanent Secretary in the Ministry of Mines and Mining Development, emphasized the critical need for local suppliers to innovate and adapt.
“The mining industry must capacitate suppliers to build resilience in the face of geopolitical changes that have dramatically altered the global landscape. We must ensure that we have a local quota supply, however, suppliers must be innovative. The banks must provide affordable capital. We need to be proactive and mitigate risks. Suppliers must heed complaints regarding quality, lead time, and capacity to produce in the face of imports,” Kunaka stated.
Geopolitical situations significantly affect the supply chain of the local mining sector by disrupting access to essential imported materials and equipment, altering trade policies, and impacting market access. Political instability can lead to transportation disruptions and increased costs, while changes in trade agreements or tariffs can either hinder or enhance local competitiveness. Additionally, geopolitical tensions can deter foreign investment, limit funding for operations, and strain financial health, ultimately affecting the overall resilience and efficiency of local suppliers in the mining industry.
Despite the urgency of his message, local suppliers are grappling with significant challenges. Frequent breakdowns and high maintenance costs, combined with a struggling economy, hinder their ability to retool effectively. Many companies rely on outdated techniques due to insufficient research and development funding, as they barely manage to stay afloat.
Local suppliers often lack the capacity to meet the demands of mining companies, primarily due to antiquated machinery and a scarcity of working capital for essential raw materials and consumables. Consequently, local products struggle to compete in the marketplace, facing high prices exacerbated by the cost of doing business and the rising expenses associated with ZESA.
Furthermore, the high costs imposed by ZESA, along with fluctuating monetary policies, further complicate the situation for local suppliers. Without substantial reforms and investments in innovation, the local mining supply sector risks being overshadowed by imported alternatives, undermining the potential for sustainable growth within the industry.
For the mining sector to thrive, a concerted effort must be made to empower local suppliers, fostering a resilient and competitive environment that can withstand global pressures.