Headwinds choke mining sector

SAMANTHA MADE AND LIVINGSTONE MARUFU

Zimbabwe’s mining sector is grappling with multiple headwinds from crippling power outages and soaring operational costs to foreign currency shortages and policy uncertainty, threatening to stall its growth trajectory, a new survey reveals.

Speaking at the Chamber of Mines’ State of the Mining Sector Survey held in Harare yesterday, lead researcher Professor Albert Makochekanwa said the sector is eager to expand production but remains constrained by persistent electricity shortages.

“Mining executives are generally pessimistic about power supply availability at their operations, with a measured index of -6.3,” Makochekanwa said. “The mining industry is losing up to 10% of potential output due to power outages, with electricity demand expected to increase to 880 MW in 2026, up from around 750 MW in 2025.”

The survey further highlighted that infrastructure bottlenecks are weighing heavily on mining prospects. Frequent breakdowns at Hwange power station, unstable distribution networks, and rising electricity demand continue to constrain operations and reduce potential output.

“Respondent mining executives are generally pessimistic about power supply availability at their operations in 2026,” Makochekanwa added. “The combination of outdated infrastructure and rising demand presents one of the most significant risks to operational continuity.”

High operational costs, regulatory hurdles, and infrastructure gaps are also dampening investment competitiveness. “Respondent mining executives are generally pessimistic about investment competitiveness prospects, with a measured index of -6.3, citing high cost of doing business, regulatory bottlenecks, and infrastructure gaps as key variables weighing down investment competitiveness,” he said.

Executives further anticipate increasing fiscal pressures, with a measured index of -13 reflecting concerns over potential new taxes or increases to existing levies in 2026. “Mining executives are already experiencing increased pressure from Government and ZIMRA to collect more revenue and are concerned that new taxes or increases to existing ones may be introduced in 2026,” Makochekanwa noted.

Access to foreign currency remains another major worry for mining operators. “Respondent mining executives are pessimistic about access to foreign currency to meet their operational and capital expenditure requirements,” he said. “Most respondents are concerned that availability of foreign currency may worsen in 2026, citing uncertainties around implementation of the de-dollarization plan that may result in reduced foreign currency retention for the mining industry.”

Policy and legislative uncertainty continues to loom large. Delays in finalizing amendments to the Mines and Minerals Act, the Economic Empowerment Bill, the Local Content Implementation Framework, and the “use it or lose it” policy are keeping executives on edge. “Respondent mining executives expect the mining policy and legislative environment to remain suboptimal in 2026, with a measured index for mining policy at -3,” Makochekanwa said.

Despite these headwinds, there is cautious optimism among mining executives. The Mining Business Confidence Index (MBCI) for 2026 shows a positive +11.4, underpinned by strong commodity market outlooks and projected profitability.

“Respondent executives are generally optimistic about the profitability of their businesses in 2026, with a measured index of +7, citing improved viability on the back of attractive prices,” Makochekanwa said. Mineral revenues are projected to grow to US$7.5 billion in 2026 from approximately US$7 billion in 2025, driven largely by gold and PGMs, which will account for over 70% of earnings. Favorable prices for lithium and other key commodities are also expected to support growth. Employment is set to rise, with mining companies planning an average 5% headcount increase in line with capacity expansions.

Speaking at the same event, Mines and Mining Development Minister Winston Chitando outlined the government’s forthcoming Responsible Mining Initiative 2, which will enforce stricter environmental compliance and transparency in the sector.

“By the end of this year, the government will launch the much-talked-about Responsible Mining Initiative 2. We will communicate the date privately to the chamber and other industry representatives, and we wish that we all come in our numbers,” Chitando said. “This initiative will place heavy emphasis on zero tolerance for environmental damage… it will also entail loss of title for those who damage the environment.”

Chitando urged mining executives to prioritise social responsibility and environmental sustainability. “It’s very important that at some stage, we also hear the state of the community… on how they are taking the mining,” he added.