- February 23, 2019
- Posted in LOCAL
Zimbabwe is poised to become a mining giant in the Southern African region on the back of its vast mineral deposits and huge investments that favour the sector’s growth.
United Kingdom based research firm, Fitch Solutions, sees Zimbabwe’s mining sector booming, with gold and platinum posting positive growth driven by an anticipated increase in metal prices.
Zimbabwe has vast mineral deposits ranging from gold, platinum, diamonds, nickel to chrome. The country is home to the world’s second largest known platinum deposits after South Africa, while its gold reserves are one of the largest in Africa.
Diamond reserves are also estimated to be the second largest after Russia.
“In terms of overall platinum output, Zimbabwe is challenging the world’s largest platinum producers, Russia and South Africa, while gold production is also set to ramp up over the medium term.
“Zimbabwe will experience a temporary boost in gold production in 2017-2019 as the impact, a gradual recovery in global gold prices and regulatory changes lead to an increase in activity by smaller mining firms. Zimbabwe’s platinum output will also grow at a steady pace, while that of its main competitors, South Africa and Russia, will stagnate over time, according to our mining team,” said Fitch.
Government is also working on improving the business environment to attract foreign direct investment in all sectors.
Already, Government has amended the indigenisation laws, which will allow foreign investors to gain full ownership in all sectors save for platinum and diamond where Government will retain 51 percent stake.
Fitch sees this as a key launch-pad to boosting investment in the mining sector.
“The new government in Zimbabwe has shown signs of progress towards implementing investor – friendly structural reforms, which will encourage FDI and buttress economic growth over the long term.
“Zimbabwe is endowed with a wealth of natural resources and vast human capital compared to regional peers,” said the UK think-tank.
Mining plays a key role to the economy, and together with agriculture, the sectors anchor the Zimbabwean economy.
It is estimated the sector provides slightly over 33 000 formal direct jobs with indirect jobs through upstream and downstream industries estimated at about 70 000 with approximately 500 000 artisanal and small scale miners. Over a million people are dependent on the sub-sector.
The projected boon in mining is also expected to see contribution towards the overall anticipated economic recovery, although this will not happen overnight.
Fitch also says, the country’s economic recovery will also be hinged on weather patterns that can sway it in either positive or negative direction.