Newly appointed Mines and Mining Development Minister Mr Wiston Chitando has shared his vision for the extractive industry, which he said will be driven by increased capacity utilisation, ability to raise capital and a commitment to exploration.
These three areas, coupled with policy clarity and consistency, will make Zimbabwe a preferred destination for mining investment.
Minister Chitando said this in response to a question posed by Reserve Bank of Zimbabwe Deputy Governor Dr Kupikile Mlambo at the launch of a Chamber of Mines State of the Mining Industry Survey report on Friday.
“The vision is to create the necessary confidence so that Zimbabwe becomes the destination of choice for mining investment.
“When we develop whatever policy or framework, we will not necessarily always agree as Government and the Chamber of Mines, but what is important for any issue that is raised is discussion. We agree or disagree and where there is agreement, implementation has to be done timeously, that’s important and that will create the necessary confidence once we have policy clarity and consistency,” Ministry Chitando said.
“As part of the vision, there are things that are fundamental to this industry, the capacity utilisation is very low apart from platinum which is at 100 percent so it’s important to target increased capacity utilisation, that’s the first thing. Secondly, there is need for new capital to open new mines and thirdly, Zimbabwe is under explored,” he said.
According to statistics given by the Ministry of Mines and Mining Development, Zimbabwe had 300 Exclusive Prospecting Orders (EPOs) at the peak of mining performance, but this has since dropped to three.
Minister Chitando said most of Zimbabwe’s exploration data was generated during the 1950s and 1960s.
This means the country has not been conducted exploration using modern methods. He encouraged local investors and fund managers to invest in the mining sector.
“We have got NSSA, pension funds and Old Mutual and they should be encouraged and given the opportunity to invest in the mining sector.
“My own opinion, certainly coming from the other side, is that local funds are averse or shy to invest in the mining sector. They are much more comfortable to invest in other sectors like retail and manufacturing, but when it comes to the mining sector, they are very shy,” the minister said.
“Confidence is required for both local and foreign investors.”
The mining industry’s contribution to total exports increased from 60 percent in 2016, to 69 percent in 2017 while its contribution to revenue collections averaged 13, 6 percent in 2017.
According to the State of the Mining Industry Survey Report, miners are bullish about the prospects for the mining industry in 2018 given the new political dispensation, with the majority of respondents (90 percent) optimistic that the new Government will endeavour to resolve all policy bottlenecks affecting the mining industry.
Survey findings show that the mining industry views the policy environment as improving, with 80 percent indicating that Government is consulting and responding to mining industry concerns, while 10 percent are neutral and the remaining 10 percent are of the view that Government should do more in addressing industry concerns.
In 2018, the mining sector is expected to record an output boom, with survey findings showing that 90% of respondents are planning to increase output by more than 10 percent.
Average capacity utilization for the mining industry is at 71 percent this year, compared to 64 percent in 2016.
The platinum group of metals sector continues to operate at around 100 percent capacity utilization, while chrome moved from 37 percent to 80 percent, diamond (58 percent to 70 percent), coal (26 percent to 50 percent) recorded significant utilization levels in 2017, compared to 2016. Declines in capacity utilization levels were recorded in respect of gold (79 percent to 73 percent) and nickel (41 percent to 39 percent).