via ‘Zim among worst destinations for mining investors’ – NewsDay Zimbabwe April 22, 2014 by Veneranda Langa
ZIMBABWE is ranked among the worst countries to invest in particularly in the mining sector, a recent report has shown.
A 2014 report by the Poverty Reduction and Economic Management Unit Africa Region ranked Zimbabwe at number 91 out of 96 in terms of best mining countries to invest in.
The report said a 2012 to 2013 survey of investors undertaken by the Fraser Institute ranked Zimbabwe that low, especially as the survey was undertaken soon after the announcement of the indigenisation policy for mining.
The policy requires a 51:49% ratio of ownership in favour of indigenous Zimbabweans.
The report cited lack of large-scale exploration and lack of investment-friendly policies as reasons for the poor showing.
“In its 2012-2013 survey of investors undertaken by the Fraser Institute, Zimbabwe ranked among the least favourable destinations at 91st out of 96 jurisdictions,” the reads report.
“Its ranking fell from the already low rank of 73 in the previous year to this year’s low, probably because the survey took place after the announcement of the indigenisation policy toward mining.”
The report said lack of large-scale exploration activities implied that the unknown mineral resources in the country continued unexplored and consequently the true potential of the country remained unrealised.
“To increase exploration for and eventually discovery of new deposits, it will be particularly important that there are policies guaranteeing security of tenure for companies,” the report says. “As most exploration is undertaken by junior companies, the ability to sell any discoveries to other companies appears central.”
Mining in Zimbabwe is, however, reported to have boomed and led to the rebound observed in exports in the last four years.
Mineral exports increased by over 150% in 2010 followed by a 30% surge in 2011.
“The mining sector boom has also been accompanied by a transformation within the sector itself: once dominated by small-scale gold production, in recent years there has been a surge in large-scale operations in platinum and diamonds,” the report said.
The report said it was essential to improve the transport infrastructure for bulk commodities such as coal and iron ore, as well as increase access to lower cost power.