LIVINGSTONE MARUFU
Zimbabwe’s mining companies need over US$5bn to recapitalise their operation in 2022 to ramp up production and reach optimum levels, the Chamber of Mines of Zimbabwe has said.
It is expected that when fully capitalised, Zimbabwe will reach the US$12bn mining industry target by next year.
Zimbabwe has over 60 recognised mineral occurrences, which when fully utilised are enough to turn around the country’s economy.
The Chamber of Mines of Zimbabwe CEO Isaac Kwesu told Business Times that mining is one of the key sectors of the economy and value addition before exporting is needed to ensure maximum benefits.
“This year the whole mining sector requires US$4.5bn for both greenfields and brownfields. The figure can go from a minimum of US$3bn to as high as US$5bn depending on the projects that were touted,” Kwesu said.
He said in the platinum, there is Karo Resources and other two key projects that can kick off; in the gold sector there are a number of new and old projects and the base metals projects can also be resuscitated or improve operations.
“All these projects to come to fruition, there is a need to harness adequate capital to achieve the US$12bn mining industry by 2023,” Kwesu said.
Last year, the economy earned close to US$5bn from mineral export receipts.
He said last year Zimbabwe was spurred on by firming commodity prices.
If the prices reverse, the country was not going to get as much revenue as it got hence there is a need to improve on production, Kwesu said.
The Chamber of Mines said the prices saved the day for the mining sector.
“Mining sector leverage on two ends which are prices and volumes but last year prices were beyond the normal prices hence there is need to produce up to our potential had gold been above 30 tonnes, we would have been above US$2bn of gold export receipts,” Kwesu said.
He said production is still way below the targets, although it was higher than initially projected.
The mining sector is expected to contribute more than 70% of the total export receipts.
It is believed gold and platinum sectors need US$1.5bn each with the remaining US$2bn expected to be shared among other minerals.
The mining sector is not experiencing power outages as it ringfenced following the payment for electricity in United States dollars.
Zimbabwe has the second largest known deposits of platinum, coal, gold, chrome and diamonds.
Experts said there is need to improve the ease of doing business to help the sector to be internationally competitive.
Miners are also calling for the removal of punitive taxes to improve the earnings of miners and attract investment into the multi-billion dollar mining sector.
More so, the foreign currency retention threshold and the huge disparities between the formal exchange rate system and parallel market are some of the biggest challenges that experts say should be addressed to boost output in the mining sector.
