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Anglo American Platinum Forecasts Sharp Earnings Decline for FY2024

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Anglo American Platinum Forecasts Sharp Earnings Decline for FY2024
Anglo American Platinum, one of the world’s largest producers of platinum group metals (PGMs), is bracing for a significant earnings decline for the year ended 31 December 2024.
By Ryan Chigoche
The company attributes this downturn to falling PGM prices and operational disruptions, reflecting the broader challenges facing the industry.
Both headline earnings per share (HEPS) and basic earnings per share (EPS) are expected to experience substantial declines.
The PGM mining group expects headline earnings to decrease by 36% to 46%, falling to between R7.6 billion and R9.0 billion from R14 billion in 2023. HEPS is projected to decline to between 2,889 cents and 3,421 cents per share, down from 5,330 cents per share in the previous period.
Basic earnings are expected to decline by 42% to 52%, ranging between R6.3 billion and R7.6 billion, compared to R13 billion in 2023. EPS is forecast to drop to between 2,395 cents and 2,889 cents per share, from 4,952 cents per share in the prior year.
The primary factor behind this downturn is a 13% drop in realized ZAR PGM prices, with palladium and rhodium prices plummeting by 24% and 30%, respectively, in US dollar terms. Weak global demand, particularly in the automotive sector where PGMs are used in catalytic converters has exacerbated the decline.
“The decrease in earnings compared to 2023 is primarily due to a 13% decline in realized ZAR PGM prices,” the company stated in a trading update.
Beyond weaker metal prices, Anglo American Platinum incurred non-recurring costs totalling R3.5 billion, linked to operational and corporate restructuring, the demerger of its PGM business, and associate losses.
 A further R1.9 billion asset write-down, mainly related to coarse particle recovery technology at the Mogalakwena mine, also weighed on earnings. These one-off costs reduced EPS and HEPS by approximately 1,700 cents and 1,100 cents per share, respectively.
Taxation and royalty payments also declined in line with lower profits, reflecting the tough operating environment.
Anglo American Platinum’s Zimbabwean subsidiary, Zimplats, reported a 7% drop in production, attributed to power outages and declining ore grades.
The challenges faced by Anglo-American Platinum and Zimplats reflect broader struggles across the PGM industry.
Weak metal prices, sluggish demand, and oversupply have eroded profitability while rising operational costs further squeeze margins.
The growing adoption of electric vehicles (EVs), which do not require catalytic converters, poses a long-term threat to PGM demand.
While PGMs remain essential for internal combustion engine vehicles, the global push for decarbonization could lead to structural declines in demand over the coming decades.
Despite these headwinds, Anglo American Platinum remains committed to operational efficiency and portfolio optimization. The company aims to unlock value from its resource base, enhance efficiency, and position itself for long-term growth. However, navigating the current volatile market will require strategic adjustments.

ZDAMWU Recognized at Annual National Labour Champions Awards 2024

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ZDAMWU Recognized at Annual National Labour Champions Awards 2024

The Zimbabwe Diamond and Allied Minerals Workers Union (ZDAMWU) has once again demonstrated its commitment to excellence in trade union leadership, as evidenced by its recent recognition at the Annual National Labour Champions Awards 2024, Mining Zimbabwe can report.

The event, organized by the Human Capital Institute (HCI), celebrated outstanding contributions to labour rights and union leadership, with ZDAMWU and its leaders receiving prestigious accolades.

ZDAMWU General Secretary Justice Chinhema was honoured with the Platinum Award for Outstanding Trade Union Leadership. This recognition underscores Chinhema’s unwavering dedication to advocating for workers’ rights and improving labour conditions within the mining sector. His leadership has been instrumental in addressing critical issues workers face, ensuring their voices are heard, and fostering a culture of fairness and equity.

The awards ceremony highlighted the importance of sustained and impactful communication in labour movements. It emphasized the need for leaders to leave a lasting legacy that benefits future generations. The event also called for a collective effort to create a better world, urging leaders to make their lifetime signature one of positive change and enduring influence.

ZDAMWU’s participation in the Annual National Labour Champions Awards 2024 not only celebrates its achievements but also reinforces its commitment to advancing the welfare of workers in Zimbabwe’s diamond and allied minerals industries. The union’s efforts align with the broader goals of the Human Capital Institute, which seeks to recognize and promote excellence in human capital development and labour leadership.

As ZDAMWU continues to champion the rights of workers, its recognition at this prestigious event serves as a testament to the union’s impactful work and the dedication of its leaders. The Platinum Award for Justice Chinhema is a well-deserved honour, reflecting his significant contributions to trade unionism and his commitment to creating a better future for all workers.

ZiG Faces Challenges Despite 90% Gold Reserves Boost

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ZiG Faces Challenges Despite 90% Gold Reserves Boost

Zimbabwe’s ambitious attempt to stabilize its economy using gold reserves and the Zimbabwean gold-backed currency (ZiG) is facing significant challenges, despite assurances from the Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mushayavanhu, that gold would anchor the nation’s currency and economic stability, Mining Zimbabwe can report.

By Rudairo Mapuranga

In his 2025 Monetary Policy Statement (MPS), Mushayavanhu outlined the central bank’s commitment to using gold to bolster the country’s reserves and support the new currency, but recent events suggest otherwise.

The launch of the ZiG in April 2024 was seen as a bold move to stabilize Zimbabwe’s currency amid the country’s long-standing economic crisis. However, by late September, the RBZ was forced to devalue the ZiG by over 40%, raising concerns about its effectiveness as a stabilizing force. The devaluation, which aimed to reduce the gap between the official and parallel market exchange rates, has instead led to widespread inflation, a drop in consumer purchasing power, and declining corporate profits.

In his MPS, Mushayavanhu highlighted the growth of Zimbabwe’s gold reserves, from 1.5 tonnes in April 2024 to 2.7 tonnes by early 2025, representing a 90% increase in reserves now valued at over US$550 million. According to the governor, this increase was designed to back the newly introduced ZiG, ensuring liquidity and instilling confidence in the currency.

“Since April 2024, our gold reserves have risen significantly, providing a solid buffer to stabilize our currency. This growth guarantees that we now have more than three times the cover for our reserve money,” Mushayavanhu stated.

Despite this, the devaluation of the ZiG in September, followed by five consecutive days of its decline in value against the US dollar, has raised questions about the RBZ’s ability to stabilize the economy through gold alone. The ZiG fell from 25.2836 to the dollar on Friday to 25.2842 by Monday, continuing its downward spiral. The black market rate for the ZiG is now as high as 38:1 against the US dollar, significantly higher than the official market rate of 28:1.

The devaluation has sparked inflationary pressures and eroded the purchasing power of consumers, while businesses are struggling to maintain profitability. The government’s decision to stagger bonus payments to civil servants, combined with the scramble for US dollars during the festive season, has put further pressure on the local currency. While the ZiG was designed to stabilize exchange rates, its failure to do so has prompted concerns from businesses and consumers alike.

Gold, which remains Zimbabwe’s most critical reserve asset, has continued to rise on the international market, with prices hitting record highs. On Friday, spot gold climbed to $2,861.46 per ounce, following a sixth consecutive week of gains. However, despite the positive performance of gold globally, the ZiG has struggled to maintain its value domestically.

In a bid to further accumulate foreign reserves, the RBZ revised its foreign currency retention policy for exporters, reducing the retention threshold from 75% to 70%. Exporters are now required to surrender 30% of their foreign currency earnings, a move that is expected to increase the flow of foreign exchange into the RBZ’s reserves. However, exporters have raised concerns that this will negatively impact their operations, particularly given the volatility of the local currency.

To cushion exporters, the RBZ introduced the US Dollar Denominated Deposit Facility (USDDDF), which allows them to invest the additional surrendered proceeds and withdraw funds in ZiG at the prevailing interbank rate. While this offers flexibility, many exporters remain apprehensive about the long-term stability of the ZiG.

Mushayavanhu expressed optimism that gold production would rise to 40 tonnes by 2025, further strengthening Zimbabwe’s gold reserves and helping the country meet its economic growth targets. The RBZ is targeting a 6% growth rate for the economy in 2025, supported by improvements in agricultural output and increased gold production.

Despite this, the continued volatility of the ZiG and the widening gap between the official and parallel market exchange rates signal that the road to economic stability may be much rockier than initially anticipated. As Zimbabwe’s gold-backed currency continues to face devaluation pressures, questions remain about the efficacy of the RBZ’s strategy in navigating the country through its economic crisis.

Gold buying prices per gram in Zimbabwe, 8 February 2025

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Gold buying prices per gram in Zimbabwe, 8 February 2025

Gold buying prices per gram in Zimbabwe today 8 February 2025, from the official gold buyer and exporter Fidelity Gold Refinery (FGR).

SG 90% and ABOVE US$87.33g
SG ABOVE 85% BUT BELOW 90% US$86.41g
SG ABOVE 80% BUT BELOW 85% US$85.49/g
SG ABOVE 75% BUT BELOW 80% US$84.56/g
SAMPLE BELOW 10g BUT ABOVE 5g US$83.17/g

Fire Assay CASH $87.80/g

NB: Fire Assay cash price is for gold above 100gs, no sample is deducted.
For the Fire Assay Transfer price, a sample of not more than 10g is deducted
A 2% royalty is charged on all deposits (Small-scale miners)
A 5% royalty is set for Primary Producers

Cash available. Fidelity Gold Refinery prices will be changing daily to match the world market.

Gold Deliveries Increase by over 31% , Driven by ASM Growth

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Gold Deliveries Increase by over 31% , Driven by ASM Growth
Gold deliveries to the country’s sole buyer and exporter, Fidelity Gold Refinery (FGR), increased by approximately 31.94% in January 2025 compared to the same period last year, driven by Artisanal and Small-Scale Miners (ASM), who recorded a 69.89% improvement in deliveries, offsetting a 21.66% decline in contributions from Large-Scale Miners (LSM), Mining Zimbabwe can report.
By Rudairo Mapuranga 
In January 2025, total gold deliveries reached 3134.3456 kg, up from 2375.3259 kg in January 2024. ASM contributed a significant 2265.5474 kg, compared to 1333.4371 kg delivered in January 2024. Meanwhile, LSM saw a drop, delivering 868.7982 kg in January 2025, down from 1108.8156 kg the previous year. The surge in ASM output highlights the vital role small-scale miners play in driving the country’s gold production despite the challenges faced by the LSM sector.
This rise in gold deliveries builds on the strong performance of 2024, where gold deliveries to FGR increased by 26.65%, with ASM dominating the sector with a 21.41% surge. Throughout 2024, small-scale miners consistently outperformed their large-scale counterparts, contributing nearly two-thirds of the total gold delivered. By year-end, ASM had delivered 23,745.6423 kg, while LSM accounted for 12,741.1103 kg, bringing the total gold deliveries for 2024 to 36,486.7526 kg. This represents a 21.22% increase from the 30.1 tonnes delivered in 2023.
In December 2024 alone, ASM delivered 3,127.7228 kg of gold, marking a 19.57% increase from 2,615.8037 kg in November. In contrast, large-scale miners experienced a slight decline, delivering 1,034.517 kg, down 8.16% from November’s 1,126.3594 kg. The monthly fluctuations in gold deliveries reflected the volatility of the sector, but ASM’s consistent growth helped maintain overall stability.
This performance reaffirms the crucial role ASM plays in Zimbabwe’s gold production, consistently contributing the bulk of the national output. In fact, small-scale miners accounted for over 65% of total gold deliveries in 2024, demonstrating their growing importance to the country’s economy.
Despite challenges such as rising operational costs, power shortages, and unfavourable exchange rate policies, ASM has proven resilient. The sector’s ability to maintain steady output is essential for Zimbabwe’s economy, especially as large-scale mining operations face operational constraints.
Looking forward to 2025, addressing these challenges will be crucial to maintaining growth. The early indications in January suggest that ASM will continue to drive gold production, while large-scale miners must overcome their current challenges to reclaim their previous levels of contribution. A balance between the two sectors will ensure sustained growth in Zimbabwe’s mining industry, which remains a cornerstone of the national economy.

No to Raw Lithium Exports – Chitando

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No to Raw Lithium Exports – Chitando

Zimbabwe has been making significant strides to position itself as a key player in the global lithium market. The country’s lithium resources, currently at the concentrate stage, are central to the government’s broader economic strategy.

By Ryan Chigoche

However, the ultimate goal, according to Minister of Mines and Mining Development Hon Winston Chitando, is to progress from lithium concentrate production to the manufacturing of lithium batteries and solar panels, thus driving local industrialization and sustainable energy solutions.

Speaking at the recently concluded Investing in Africa Mining Indaba event in Cape Town, Chitando outlined the government’s plan for adding value to Zimbabwe’s lithium production, which is an essential step for boosting the country’s economy and securing its place in the rapidly growing global lithium market.

“We have asked the lithium players to come together with a joint strategy for value addition to the final product, which, at this stage, is the production of solar panels and lithium batteries,” Chitando said, emphasizing the importance of a collaborative approach to the future of the lithium sector.

At present, Zimbabwe is still producing lithium at the concentrate stage, but the government is working to create a value chain that transforms this raw material into finished products, including batteries and solar panels. This strategy is crucial not just for increasing the value of Zimbabwe’s lithium but also for creating jobs and stimulating the local economy.

As part of this vision, the government has signed a Memorandum of Understanding (MOU) with a major lithium player for the Mapinga mines, located just outside Harare.

This company, which ranks among the top three in terms of lithium production, has committed to processing lithium beyond the concentrate stage.

“This player is very significant in lithium production,” Chitando noted. “They are going to process value-added lithium beyond the concentrate stage, and it’s an agreement which has been signed by the government.”

The Mapinga project is expected to play a pivotal role in Zimbabwe’s lithium processing sector, bringing the country closer to its goal of producing higher-value lithium products.

In the near future, the government plans to introduce measures that will ban the export of raw lithium concentrate.

“Once this entity is up and running, and they are now value-adding beyond the concentrate stage, we will ban the export of concentrate. You have to sell to them,” Chitando explained. This decision is part of the government’s strategy to ensure that Zimbabwe not only benefits from its vast lithium reserves but also participates in the higher-value stages of the lithium supply chain.

However, the Minister stressed that this move would not be exclusive.

“What we are saying to the lithium players is it’s not exclusive. The agreement we have signed for the value-adding of lithium up to the final product is open for other players who have the appetite, technical, and financial capacity to come up with their own investment plans,” Chitando clarified. This approach encourages collaboration but also offers flexibility for other players in the sector. “They have to work together and invest in a common value addition process, or they can come up with different investments,” Chitando added, emphasizing the need for innovation and investment in the sector.

The government is also mindful of providing time for the sector to adjust to these changes. “No more exports of concentrates; we now want value added to our final product,” said Chitando, signalling the forthcoming shift.

The eventual ban on concentrate exports will be introduced after a specific date, allowing players to prepare for the transition and ensure that the lithium produced in Zimbabwe contributes to the local economy through value addition.

Zimbabwe’s focus on value addition is not only a means of increasing the country’s economic output but also a critical step toward sustainability.

By advancing to the manufacturing of lithium batteries and solar panels, Zimbabwe is positioning itself to contribute to the global shift toward clean, renewable energy.

With the backing of both public and private sector partnerships, Zimbabwe’s lithium industry looks poised to become a cornerstone of its economic growth in the coming decades.

Gold as a Strategic Investment: Resilience, Diversification and Long-Term Growth

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Gold as a Strategic Investment: Resilience, Diversification and Long-Term Growth

Gold has long been a cornerstone of well-diversified investment portfolios, offering a combination of stability, growth, and risk mitigation. The World Gold Council emphasizes gold’s unique characteristics, making it an essential asset for investors seeking to balance long-term risk and reward.

By Ryan Chigoche

Beyond the global gold markets, Zimbabwe’s gold mining sector has gained significant traction, offering unique investment opportunities through companies listed on the Victoria Falls Stock Exchange (VFEX).

Among these are Caledonia Mining Corporation, Padenga-owned Dallaglio Investments (operating the Eureka Mine), and Pickstone Peerless, which have been performing well and attracting interest from investors eager to tap into the country’s flourishing gold industry.

As an asset free from credit risk, gold provides a reliable store of value. Unlike other investments, it is not tied to the financial health of any institution. Its rarity, combined with its ability to preserve wealth through fluctuating market conditions, strengthens its role as a resilient investment. Gold’s multifaceted demand spanning jewelry, technology, central bank reserves, and investment products further solidifies its appeal and stability.

A Long-Standing Record of Strong Returns

Gold’s track record of delivering long-term returns has been consistently impressive. Over the past five decades, gold has provided an annualized return of approximately 8% in U.S. dollar terms, often outperforming bonds and closely rivaling equities.

This performance is no accident, as the Gold Long-Term Expected Return (GLTER) model shows that gold’s returns closely track global GDP growth and consistently beat inflation. This makes gold not only a hedge against uncertainty but also a strategic asset that enhances overall portfolio returns.

In addition to its strong return potential, gold acts as a key diversifier. Unlike many traditional assets, which tend to move in tandem during market downturns, gold often behaves oppositely. It serves as a safe haven during times of economic turbulence, as demonstrated during the Global Financial Crisis (GFC) of 2008–2009 when gold surged by 21% in U.S. dollar terms, while equities and commodities saw sharp declines.

More recently, during the market pullbacks of 2020 and 2022, gold’s ability to retain value again provided a protective cushion for investors, reinforcing its role as a diversifying asset in volatile markets.

Gold as a Hedge: Inflation, Deflation, and Currency Protection

One of gold’s most valuable qualities is its ability to act as a hedge against inflation. Over the long term, gold has outpaced inflation, preserving purchasing power for investors.

During periods of high inflation, gold’s price typically accelerates as investors turn to it as a store of value when fiat currencies lose their purchasing power. On the flip side, gold also performs well during deflationary periods marked by low interest rates and financial stress, which increase demand for secure assets.

Additionally, gold serves as a hedge against currency devaluation. It has outperformed all major fiat currencies over time, making it an essential asset during periods when central banks increase money supply. As currencies weaken, gold typically appreciates, offering investors protection from currency risk.

Enhancing Portfolio Performance with Gold

Gold’s combination of strong returns, diversification benefits, and liquidity makes it an essential addition to investment portfolios. Analysis suggests that portfolios with even a small allocation to gold—typically between 2% and 10%—have historically delivered superior risk-adjusted returns over 1-, 5-, 10-, and 20-year periods.

For example, a portfolio with a 60% allocation to stocks and 40% in bonds over the past 20 years had a Sharpe ratio of 0.64. By adding just 5% in gold, the portfolio’s risk-adjusted return increased by 3.5%. The benefits were even more pronounced for portfolios with higher risk profiles. Adding gold helps reduce maximum drawdowns, increase portfolio efficiency, and target higher returns for the same level of risk.

The optimal allocation of gold varies by an investor’s risk tolerance and portfolio mix. As the risk profile of a portfolio increases, the allocation to gold should rise to maximize diversification. Even a modest gold allocation can significantly improve outcomes, particularly during periods of market stress.

Gold’s Diversification Benefits: A Hedge Across Economic Cycles

Gold’s diversification benefits extend beyond its ability to protect during downturns. Many assets, such as stocks and bonds, become more correlated during market selloffs, meaning they tend to lose value simultaneously. Gold, however, typically moves in the opposite direction, offering protection when equities fall and helping investors mitigate risk during market volatility.

Interestingly, gold’s performance is not limited to times of crisis. As both an investment asset and a consumer good, gold also performs well during periods of economic growth. When incomes rise and consumers demand more jewelry and technology, gold demand increases, providing returns during economic expansions. This dual nature allows gold to offer diversification in both bullish and bearish market conditions, making it a well-rounded asset for investors.

Gold’s Deep and Liquid Market

Gold’s liquidity is another compelling reason for its inclusion in investment portfolios. The global gold market is one of the largest and most liquid in the world, making it easy for investors to buy or sell without significantly affecting the price. With physical gold holdings by investors and central banks valued at over US$5.1 trillion, complemented by more than US$1 trillion in derivatives trading, the market depth ensures smooth transactions, even for institutional investors.

Additionally, physical gold exchange-traded funds (ETFs) trade over US$2 billion daily, further enhancing liquidity and providing investors with flexibility. This makes gold an especially attractive asset for those seeking quick access to capital.

Aligning with ESG Objectives

Gold is increasingly becoming a popular choice for investors focused on environmental, social, and governance (ESG) factors. Leading gold miners are working to minimize their environmental footprint, adhere to stringent social standards, and contribute positively to local economies. By choosing responsibly sourced gold, investors can align their portfolios with sustainable practices while mitigating exposure to climate-related risks.

Gold’s alignment with ESG objectives enhances its appeal to a broader range of investors, particularly those who wish to support responsible mining practices while maintaining solid financial returns.

Understanding the Potential Risks of Gold

As with any asset, investing in gold carries certain risks. One important consideration is that gold doesn’t generate income. Unlike stocks that pay dividends or bonds that provide interest, gold’s returns come solely from price appreciation.

Gold also experiences periods of price volatility. While it is generally less volatile than other commodities and risk assets, it can still experience substantial price swings, particularly in the short term. However, gold’s price movements are asymmetric—it tends to rise more significantly when equities fall than it loses value during equity rallies.

Key Takeaways for Investors

Gold offers numerous benefits for long-term investors:

  • It has consistently delivered positive returns, outpacing inflation and performing well across various economic conditions.
  • As an effective diversifier, gold provides a hedge against market downturns while delivering positive returns during economic expansions.
  • The gold market is highly liquid, valued at over US$6 trillion, ensuring ample opportunities for institutional and individual investors alike.
  • Adding even a modest allocation of gold to a traditional stock-and-bond portfolio has historically improved risk-adjusted returns, reduced volatility, and maximized long-term outcomes.
  • Gold aligns with ESG principles, offering an ethical investment option that supports responsible mining practices.

Given its resilience, liquidity, and ability to enhance portfolio performance, gold deserves a strategic place in diversified investment portfolios. The optimal allocation will depend on individual risk preferences and portfolio goals. However, even a small allocation can significantly enhance portfolio returns and reduce volatility over time.

Gold buying prices per gram in Zimbabwe, 7 February 2025

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Gold buying prices per gram in Zimbabwe, 7 February 2025

Gold buying prices per gram in Zimbabwe today 7 February 2025, from the official gold buyer and exporter Fidelity Gold Refinery (FGR).

SG 90% and ABOVE US$86.25g
SG ABOVE 85% BUT BELOW 90% US$85.34g
SG ABOVE 80% BUT BELOW 85% US$84.42/g
SG ABOVE 75% BUT BELOW 80% US$83.51/g
SAMPLE BELOW 10g BUT ABOVE 5g US$82.14/g

Fire Assay CASH $86.71/g

NB: Fire Assay cash price is for gold above 100gs, no sample is deducted.
For the Fire Assay Transfer price, a sample of not more than 10g is deducted
A 2% royalty is charged on all deposits (Small-scale miners)
A 5% royalty is set for Primary Producers

Cash available. Fidelity Gold Refinery prices will be changing daily to match the world market.

Manhize Steel Plant Begins Steel Bar Production

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Manhize Steel Plant Begins Steel Bar Production

Dinson Iron and Steel Company (Disco) has begun steel bar production at its Manhize steel plant, marking a significant milestone for Zimbabwe’s industrial sector, Mining Zimbabwe can report.

By Rudairo Mapuranga

With backing from the Tsingshan Holding Group, the plant is set to become Africa’s largest integrated steel producer, with an annual capacity of 1.2 million tonnes.

Steel production is expected to meet local demand and supply exports to neighbouring countries, reducing Zimbabwe’s reliance on imports. Disco is committed to sustainable practices while boosting local employment and infrastructure.

According to Disco Operations Manager Wilfred Motsi, there is great optimism about the project’s potential.

“This is a momentous step for both our company and Zimbabwe. Our investment will not only transform the local steel industry but also spur economic growth by creating jobs and building export capacity.”

The company has ambitious plans to expand its product range, contributing significantly to Zimbabwe’s national development goals. This new phase of steel production is pivotal in enhancing the country’s economic resilience and ensuring its prominence in the global steel industry.

Disco’s Manhize project represents a long-term vision that will not only serve Zimbabwe’s internal steel needs but also contribute to the Southern African Development Community (SADC) region. The production of steel bars is just the first phase of a comprehensive project. As the plant grows, it will increase production capacity and product offerings, including hot-rolled coils, rebar, wire rods, and eventually stainless steel.

This steel project is essential for Zimbabwe, which has long relied on imports. For decades, the country imported large quantities of steel, negatively affecting foreign currency reserves. With the new production capacity, Zimbabwe is expected to meet domestic demand and potentially export steel products to neighbouring countries, improving its trade balance and economic resilience.

The project’s economic benefits extend beyond direct financial gains. The plant is expected to create thousands of jobs, both directly at the factory and indirectly through supply chains in mining, transport, and related industries. Local communities around Manhize will also benefit from improved infrastructure and development programs, aligning with Disco’s commitment to corporate social responsibility and sustainable development.

According to industry experts, Zimbabwe is ideally suited for such a massive steel project due to its rich iron ore reserves and proximity to essential inputs such as coal and limestone. Additionally, the country’s central location within southern Africa makes it a convenient hub for exporting steel to other parts of the continent.

With the new plant, Disco hopes to make Zimbabwe a key player in the global steel industry. Tsingshan Holding Group has also committed to using modern, energy-efficient technologies at the Manhize plant, ensuring that steel production meets global environmental standards in line with Zimbabwe’s sustainability goals.

The commencement of steel bar production marks the beginning of broader efforts to develop Zimbabwe into an industrial powerhouse. As the project progresses, it is expected to significantly boost Zimbabwe’s GDP and contribute to the national goal of achieving upper-middle-income status by 2030.

Backed by substantial investments from Tsingshan Holding Group, the Manhize steel project represents a crucial step toward Zimbabwe’s industrial future, with the potential to create lasting economic and social benefits while strengthening the country’s economic sovereignty.

Can Miners Survive Another Blow? New 70% Forex Retention Policy Threatens the Sector

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Can Miners Survive Another Blow? New 70% Forex Retention Policy Threatens the Sector

As Zimbabwe’s mining sector adjusts to the latest foreign currency retention policy changes, many miners are left questioning how they will manage to stay afloat under the new rules, Mining Zimbabwe can report.

By Rudairo Mapuranga

The Reserve Bank of Zimbabwe (RBZ) yesterday announced a reduction in the foreign currency retention threshold from 75% to 70%, a decision that has sparked concerns across the industry. Miners had already argued that the 75% threshold was unsustainable. With the new policy now in place, the sector faces an even greater uphill battle.

Last year, the issue of miners’ compensation under the then 75/25 retention policy was raised, which left miners with only 75% of their forex earnings. Many in the industry felt this was not enough, especially considering Zimbabwe’s heavy reliance on USD transactions. Now, with the new 70% threshold, miners are forced to give up 30% of their hard-earned forex—a move that could significantly impact their ability to cover essential costs like electricity, equipment, and operational financing.

In a report last year, Caledonia Mining Corporation reported a substantial foreign exchange loss of US$4.1 million in the first quarter of 2024, compared to a US$1.5 million gain in the same period in 2023. This loss was largely driven by the volatile exchange rate and the gap between the official rate at which miners were required to convert their earnings and the black-market rate used to purchase goods and services.

Zimbabwe’s economy is overwhelmingly forex-dependent, with more than 80% of transactions conducted in USD. Miners argue they need a larger share of their foreign currency earnings to keep their operations running smoothly. As one mining executive put it last year: “We expected the central bank to raise the retention threshold to 80% or at least drop it entirely, given the situation we’re facing.”

Gladys Mutsopotsi-Shumbambiri, an economist with deep experience in monetary policy, explained that “lower forex retentions mean reduced inflows of foreign currency into the economy. This places the burden on the RBZ to source ZWL to fulfil its obligations, potentially leading to increased money supply and inflationary pressures.” Her insights highlight the delicate balance the RBZ must maintain between building reserves and sustaining industries like mining, which rely heavily on foreign currency for operational costs.

The Gold Miners Association of Zimbabwe (GMAZ) has been vocal about the potential risks of reducing forex retention. Last year, Irvine Chinyenze, CEO of GMAZ, warned that “there was a danger that smuggling would become rampant as miners would look for more lucrative markets where they could get value for money, rather than lose value in the process.”

Chinyenze was clear: “If this policy direction isn’t reversed, the country could lose over US$2 billion in revenues due to externalised forex.” His concerns are not unfounded. If miners cannot retain enough forex to cover their costs, some may be tempted to smuggle their gold to international markets where they can get better returns, depriving Zimbabwe of much-needed foreign currency.

Additionally, smuggling opens the door to criminal enterprises. Chinyenze noted that the lowered retention threshold could “create an influx of gold mafia gangs, as the authorities would be creating a thriving environment for them to smuggle and externalise United States dollars through illicit deals.”

The mining sector is facing significant pressure. The Chamber of Mines, which represents major mining firms in Zimbabwe, had proposed that the forex retention rate be increased to 80% to ensure miners could meet rising operational costs.

“Mining companies now require at least 80% of their foreign currency earnings to meet the increased demand for forex and fund their operational requirements and expansion projects,” the Chamber said in a proposal to the Ministry of Finance.

The concerns of the mining sector go beyond day-to-day operations. A lower retention threshold means less foreign currency available for the entire economy, potentially leading to supply shortages, price hikes, and inflation. Mutsopotsi-Shumbambiri pointed out that “the demand for forex can lead to inflation, resulting in miners losing their local currency portion to inflation.”

The government now faces a crucial decision. The mining sector has been a cornerstone of Zimbabwe’s economy, and without adequate support, the industry’s growth could stall. In 2022, mining growth slowed to 7%, and mining costs rose by 15%, driven largely by energy prices. The increased cost of doing business, coupled with limited access to forex, could push the industry to a breaking point.

The RBZ’s decision to reduce the foreign currency retention threshold to 70% is a significant blow to the mining sector, which had already been struggling to survive under the 75% retention policy. Without a fair system in place, miners risk losing out on the forex they need to stay in business, potentially driving them toward illegal markets and reducing production across the board.

The government must take these concerns seriously and consider revising the forex retention policy before it’s too late. Zimbabwe’s miners deserve fair compensation for their hard work—compensation that reflects the realities of operating in a forex-dependent economy. The consequences of failing to do so could be catastrophic, not only for the mining sector but for the entire economy.

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