Zimbabwe’s mining companies require over US$14 billion to sustain operations and ramp up production over the next five years, want Government to resolve several outstanding issues they say are constraining optimal performance of the sector, chief among them a fragmented fiscal regime.
The mining companies said while they appreciated efforts the Government had taken to support the industry; several issues remained outstanding and were constraining optimal potential of the sector.
Mining is key and strategic sector to the Zimbabwe economy, accounting for over 60 percent of the country’s export earnings, which stood at US$4,1 billion in the 12 months to December 2018.
Notably, US$1 billion of export earnings from mineral exports last year was spent on procurement of key inputs from local suppliers in manufacturing, plastics and rubber, iron and steel, electricity.
Sectors that include distribution, non-eletrical equipment, fibres, inks, chemicals and mining itself also benefited from revenues generated by the mining industry during the period under review.
Chamber of Mines of Zimbabwe (CoMZ) outgoing president Batirai Manhando told the miners’ gathering in Victoria Falls last week that prospects were bright, but several issues remained outstanding.
Manhando said while the mining industry was fully aware and appreciates the efforts by Government; resolving outstanding matters was critical for sustainable growth for the mining industry.
He said completion of ease of doing business reforms; finalisation of harmonisation of the Labour Act, reducing taxes on the industry, making royalties deductible for tax purpose, rural district and environmental charges will drive growth in mining and its contribution to the fiscus.
The former CoMZ president said focus should be placed on examining factors that constitute the best policy environment that enables miners not only to maintain current production, but to expand it. Manhando said Zimbabwe should take a leaf on how mining can contribute to development from successful mining jurisdictions such as Canada, Australia, Sweden and Botswana, closer home. He said on indigenisation, the industry expected recent pronouncements by Government that it will lift 51/49 indigenisation requirements to be drafted into law, to sent clear and positive signals to investors.
The SMP Global Market Intelligence Report on exploration estimates that the exploration the global budget for non-ferrous metals was an estimated US$10 billion in 2018 from US$5 billion 2017, mainly going to Burkina Faso, Ghana and Cote d’ivoire.
However, Manhando said the medium to long term prospects of the mining industry were bright with production projected to grow.
However, while the sector registered sterling performance last year, growth is projected to decline this year, due to the adverse impact of the production drop recorded in the first three months of this year.
Production in the sector grew last year on the back of increased capacity in 2018 to 75 from 71 percent.