Tough times ahead – Chamber Predicts Continued Softening of Commodity Prices
The Chamber of Mines of Zimbabwe (CoMZ) has forecasted that the challenges faced by the mining industry due to the softening of certain platinum group metals (PGM) will persist over the next 12 months and beyond.
In a statement, CoMZ highlighted concerns regarding weak demand and the potential long-term decline in PGM prices over the next 12 months.
“We anticipate the PGM market to remain weak in the next 12 months,” the CoMZ said.
According to the Chamber of Mines, the government of Zimbabwe should intervene and assist in reducing costs, specifically in areas such as electricity tariffs and taxes.
“The industry is calling upon the Government to intervene and assist in reducing costs, specifically in areas including electricity tariffs and fiscal charges, to minimize mine closures and ensure that mining companies survive this difficult period,” stated CoMZ.
The downturn is expected to lead to the suspension of some capital projects and deter investment in new projects and exploration activities, further dampening prospects for the PGM sector.
To mitigate the impact of low prices, mining companies have implemented measures to manage production costs, including improving efficiencies and deferring capital projects. Companies also plan to increase production to offset revenue losses resulting from low commodity prices.
However, these initiatives have proven insufficient to restore the viability of operations, and some mining companies are now reducing their workforce to supplement these measures.
About Chamber of Mines of Zimbabwe
The Chamber of Mines Zimbabwe (COMZ) is a private-sector voluntary organization established in 1939 by an Act of Parliament. The members include mining companies, suppliers of machinery, spare parts, and chemicals, service providers including banks, insurance companies, consulting engineers, and various mining-related professional bodies and individuals.