Mining ZimbabweLatest Mining News, Policy and Industry Updates

The mining industry in Zimbabwe is facing a mounting crisis, with projected losses of US$500 million in 2025 due to worsening power outages. These disruptions are severely impacting production, leading to reduced output and significant revenue losses.

By Ryan Chigoche

Zimbabwe’s power supply has long been fragile, with most mining companies experiencing unscheduled power outages and fluctuating voltage levels.

According to the latest State of Mining Sector Survey Report, 99% of local miners are dealing with crippling unscheduled power outages, averaging around eight hours per day. The report highlights the detrimental effects of these outages, with nearly all respondents indicating production stoppages and output losses.

“Almost all respondents indicated that power outages were resulting in production stoppages and output losses,” the report stated. “About 76% reported losing up to 10% of their production potential, while 24% indicated losses exceeding 10%.” An analysis of the survey data estimates that the mining industry has lost around US$500 million in potential revenue due to output losses arising from power outages.

As the country’s largest energy consumer, the mining sector’s demand for power is projected to increase by 18% to around 700MW in 2025, with diesel usage expected to rise by 12%. The combination of increasing demand and inadequate supply has exacerbated the power crisis, posing a significant threat to the industry’s sustainability.

To address this critical issue, mining companies have called on the Zimbabwe Electricity Supply Authority (ZESA) to implement several measures. Firstly, they advocate for release from long-term power supply contracts, allowing them to source alternative power from private independent producers like the Intensive Energy Users Group. Secondly, they urge ZESA to expedite the licensing of Independent Power Producers (IPPs) to help increase the overall power supply in the country.

Furthermore, mining executives have emphasized the need to prioritize mining companies for available power. By ensuring the mining sector receives a reliable and consistent power supply, the government can mitigate the negative impacts of power outages on production and revenue.

The mining industry’s challenges extend beyond power outages. The sector is also grappling with infrastructure constraints, rising costs, and uncertain commodity prices. These factors, combined with the energy crisis, pose a significant threat to the industry’s long-term viability.

To ensure the sustainability of the mining sector, it is imperative that the government takes decisive action to address these challenges. By implementing reforms, investing in infrastructure, and supporting the growth of renewable energy sources, Zimbabwe can create a more conducive environment for mining operations and unlock the sector’s full potential.

The Zimbabwe Miners Federation (ZMF) has commended the government’s efforts in supporting the mining sector and has called for continued commitment to sustainable mining practices, Mining Zimbabwe reports.

By Rudairo Mapuranga

Speaking at the ZMF small- to medium-scale conference held last Friday at the Zimbabwe International Exhibition Centre on the sidelines of the Mine Entra Expo in Bulawayo, ZMF President Ms Henrietta Rushwaya praised the sectoral reforms implemented by the government, which have significantly contributed to the country’s GDP growth.

“The country’s policies are moving in the right direction, especially regarding beneficiation.

“We are pleased to see the government’s focus on sustainable mining, which is crucial for the long-term health of our industry,” Rushwaya said.

Ms. Rushwaya emphasized the importance of adhering to government regulations, such as the Zimbabwe Revenue Authority (ZIMRA) Act, the Environmental Management Agency (EMA) Act, the Mines and Minerals Act, and the Immigration Act.

She also stressed the need for zero tolerance toward practices that harm the environment, including deforestation, habitat destruction, pollution, soil erosion, human-wildlife conflict, and loss of biodiversity.

“As small-scale miners, we have a responsibility to operate in a sustainable manner. By following government guidelines and adopting environmentally friendly practices, we can contribute to the sustainable development of our country,” Rushwaya said.

Mining has long been a cornerstone of Zimbabwe’s economy, providing valuable resources, employment opportunities, and economic growth. However, the need for responsible mining practices has become increasingly apparent. Two years ago, the government launched the Responsible Mining Audit Initiative to address this need by holding mining companies accountable for their operations and ensuring they benefit the nation and its people.

One of the primary benefits of the initiative is mitigating the environmental impacts of mining operations. By reducing water and air pollution, protecting biodiversity, and minimizing land degradation, responsible mining practices lead to improved ecological sustainability. This effort ensures the preservation of natural resources, benefiting local communities and future generations.

The initiative also emphasizes the importance of engaging with local communities. Responsible mining companies will implement social programs that contribute to the well-being and development of these communities. Investments in infrastructure, healthcare, education, and the creation of sustainable economic opportunities are expected to improve the quality of life for community members, fostering a stronger bond between mining companies and residents.

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.

The Zimbabwe Electricity Supply Authority (ZESA) has urged miners to incorporate the potential for electricity price hikes into their operational plans, as the utility continues to advocate for cost-reflective tariffs.

By Ryan Chigoche

For years, miners in Zimbabwe have expressed concerns about the high cost of electricity, which has become a significant burden on their operations. The escalating electricity prices are particularly alarming, as they directly impact the profitability of mining ventures.

At day two of Mine Entra, ZETDC General Manager Abel Gurupira addressed the audience attending a conference, warning miners to prepare for upcoming power tariff increases. He emphasized that these hikes are preferable to the frequent load shedding that has plagued the industry.

“We are solely reliant on thermal power at 12 cents, and that’s the same tariff at which we generate our power. If you add 14% to 12 cents, the costs will show that we are struggling, achieving a technical loss of 20% due to ageing equipment.”

Gurupira elaborated on ZESA’s financial challenges, stating, “US dollar obligations per month total US$92 million against the US$55 million we collect, with only US$45 million actually collected, leaving the balance payable at the interbank rate. You are not exempt from load shedding. Prepare for an increase in tariffs.”

To mitigate the ongoing power crisis, ZESA has initiated a series of short, medium, and long-term strategies. Recently, the authority has made strides by incorporating Independent Power Producers (IPPs) into the grid, adding 25 MW of capacity. Additionally, miner Zimplats has launched a 35 MW solar plant, contributing to the diversification of energy sources alongside other projects in the pipeline.

As part of a broader effort to enhance efficiency, ZESA is undergoing a restructuring process aimed at eliminating redundancies. This move is intended to streamline operations and improve service delivery. Furthermore, there is an increasing involvement of the private sector in Zimbabwe’s power industry, signaling a shift toward more collaborative solutions to the electricity crisis.

Despite these efforts, the future remains uncertain. Miners are encouraged to proactively assess their energy strategies in light of the anticipated price adjustments and continue advocating for sustainable energy practices.