Miners in dire straits

CLOUDINE MATOLA

Zimbabwe’s mining industry is facing dire economic conditions that have left miners in a precarious situation,Business Times can report.

This strain   puts pressure on the economy because the mining industry accounts for 13.5%  of GDP, 80% of exports, 19% of government revenue, and 70% of foreign direct investment.

The mining industry, according the Chamber of Mines of Zimbabwe CEO, Isaac Kwesu, is  grappling with  its toughest period  in more than 10 years, facing a plethora of obstacles, including worst commodity downturn, skyrocketing production costs, excessive taxes and fees, difficult access to foreign markets, and a deteriorating environment for mining policies.

The crux of the matter  is that miners are facing a plethora of obstacles, such as skyrocketing production costs, excessive taxes and fees, difficult access to foreign markets, and a deteriorating environment for mining policies.

Several executives in the resources sector provided a bleak and dire assessment.

“Approximately 50% of the mining executives  indicated that they  were struggling  to break even while more than 70% indicated  that they are expecting  their profitability  to worsen ,” part of the latest report by Chamber of Mines of Zimbabwe reads.

It continues: “The mining companies are experiencing  rising  cost of production citing  high electricity charges  at 21% as a major cost driver.  Other  major cost drivers are  procurement (39%), labour (32%).”

The majority of mining executive, infact 90%, indicated that  payment of   electricity bills must be done  in line with prevailing foreign currency retention framework.

Executives in the PGMs sector expressed disquiet over the  anticipated implementation of the export tax, effective January 1, 2024.

They said  it would impact negatively  on the viability of their projects.