Minerals growth output seen suffering minus 40 % decline by year end
MINERAL production in Zimbabwe will decline to around minus 40 % by year end owing to a host of challenges confronting the mining sector, the State of the Mining Industry 2019 survey reports.
The report, released recently and compiled by the Chamber of Mines, established that key minerals were expected to record declines in output growth.
“Mineral output prospects survey findings show that key minerals are expected to record declines for selected key minerals ranging as follows; gold between -5% to -35% ; platinum 0% to -7%; diamond -30% to -40%; chrome -10% to -20%; nickel -2% to -10%) and coal -10% to -40% ,” said the document.
However, the annual report observes, in 2020, key minerals like gold are expected to register growth between 5 % to 40 %, ferrochrome 5% to 20 %, diamond 10%, to 20% and coal (5% to 15%.
The majority of respondents constituting 90 % indicated that they signed contracts with the Zimbabwe Electricity Supply Authority for dedicated power and committed to pay a revised foreign currency tariff in advance but were not receiving the energy.
Turning on to government’s vision for achieving the US$ 12 billion industry by 2023 , players in the mining industry raised concern over the need to avail adequate capital for expansion of current production, need to reopen closed mines and development of new mines; need for adequate infrastructure and competitively priced electricity, rail, water, roads and Information Communication Technologies.
“Realisation of the above vision requires adequate and accurate information for the crafting of optimal policies that supports rapid growth and development of the mining sector,” said Chamber of Mines president, Elizabeth Nerwande.
The study also called on the need to attract and retaining critical skills to match the rapid expansion of the mining industry; aligning the fiscal and monetary frameworks to the new growth targets through optimal tax and foreign exchange framework that sustain mining operations.
Said the survey, “Key legislative and policy matters raised by mining executives include the following: energy and infrastructure policy, foreign exchange policy; macroeconomic policy; fiscal policy; Minerals Development Policy, environmental management policy and Mines and Minerals Act.”
Almost all respondents 100 % indicated that the current foreign exchange retention thresholds are inadequate, citing high imports of critical materials for production; emerging demands on mining for payment of electricity bills, royalty, fuel in forex.
Notably, 100 % of respondents indicated that their cost of production had increased by more than 20% in 2019, compared to 2018 arguing that the surrendered portion to the central bank liquidated at the interbank rate at a time local inputs are priced at a factor which is around twice the interbank rate_New Zimbabwe