The Mines and Mining Development Ministry budget allocation of $3 billion, approximately US$3 million at last auction rate, points to the Government’s desire for a private sector-led mining sector growth.
The sector is estimated to grow 3,4 percent in 2021, before reaching 8 percent in 2022, as the country continues to leverage its mineral resources to achieve the desired growth in line with the US$12 billion mining industry milestone by 2023.
Zimbabwe is targeting a fourfold increase in revenue from minerals by 2023, under the policy document, known as the Strategic Road to the Achievement of $12 billion by 2023, which will see gold exports at $4 billion and platinum at $3 billion.
Through the policy document, the Government is focusing on “value addition, enhanced investment within the sector, increased productivity and employment creation and increased exports and foreign-currency generation.
Private sector is expected to play a big role in the attainment of the envisaged growth while the Government will facilitate the ease of doing business to encourage investments in the area.
Earlier in the year, the country’s largest platinum producer, Zimplats, committed to spend US$1,8 billion on capital expansion projects that are currently at different stages of implementation until the year 2028.
The envisaged investment of US$1,4 billion by Zimplats will see the setting up of integrated projects, including the development of new mines, expansion of the smelter, construction of an additional concentrator, base metal refinery, sulphuric acid plant and the setting up of a 110MW solar power plant.
Chamber of Mines Zimbabwe President, Mr Collins Chibafa, recently said the mining sector remains committed to play its part to ensure the industry maximises contribution to the socio-economic development of the country.
“To this end we are working closely with the Government to ensure all challenges that are weighing down the performance of the mining sector are addressed,” he said.
He noted that there is a need for supportive measures for exporters that will guarantee increased foreign currency generation and all bottlenecks that are currently weighing down the performance of the export sector should be resolved to unlock the growth potential of foreign exchange earnings.
“When all these are taken into account, most mining companies do not have sufficient foreign currency to fund their operations,” he said.
According to Mines Minister Winston Chitando, in the platinum sector, other mining firms like Unki and Mimosa are expanding their operations while new projects are at different stages of development.
Great Dyke Investments, a consortium of Zimbabwean and Russian investors, has opened two box cuts at its site in Darwendale, near Harare, and they would be operational by 2023.
Bravura, which is owned by a Nigerian investor, has completed its drilling and will open its first box cut this year.
Karo Resources, partly owned by South Africa’s Tharisa Holdings, is also completing its exploration.
In the coal and hydrocarbons sector, Minister Chitando said, there are thermal power projects at various stages of development.
In the diamond sector, the Zimbabwe Consolidated Diamond Company (ZCDC), a diamond mining company wholly owned by the Government, is looking to produce 3 million carats this year.
Meanwhile, Minister Ncube in the 2022 Budget presented on Thursday said the ongoing economic recovery as well as favourable international mineral prices, on the back of strong global demand is expected to sustain the mining sector.
He said the budget allocation will enhance the capacity of the Ministry of Mines and Mining Development to implement a number of programmes and activities aimed at stimulating growth.
Minister Ncube said the budget will capacitate Mining Promotion Corporation (MPC) to enable it to spearhead exploration by the private sector and the Zimbabwe Geological Survey.
“In this regard, a total of $203,6 million is estimated to cater for the exploration needs for the year 2022,” he said.
In addition to that, the Government will operationalise the Cadastre System, after its successful pilot in Manicaland province.
A Cadastre system is an up-to-date electronic land information system that contains a record of interests on a particular piece of land including a geometric description of land parcels and nature of the interests, ownership or control of those interests which help to reduce title disputes and buoy the mining sector.
“In support of the programme, an amount of $146 million has been set aside under the 2022 National Budget for that purpose,” he said.
In line with the Devolution and Decentralisation agenda, the Ministry of Mines and Mining Development is establishing provincial office centres, such as Hwange, Kadoma, Zvishavane and Lupane.
The Lupane Office will be transformed into a fully-fledged Provincial Office, and the 2022 National Budget has allocated $60 million for acquisition of land, construction of appropriate offices and provision of requisite tools of trade.
On opening of closed mines, Minister Ncube said efforts towards resuscitation of the mines is being pursued to increase investments and production in the sector.
Minister Ncube noted that the small-scale and artisanal miners contribute significantly to mining production, delivering over 60 percent of gold, among other minerals.
However, this sector faces high cost of capital and other consumables required for mineral processing.
Therefore, as part of measures to capacitate small miners, the Government set aside US$10 million of the SDR resources for the opening of Bubi gold service centre.
The Finance Minister said in order to realise maximum value from the country’s minerals, the Government will target beneficiation of mineral value chains such as the gold ore to bullion processing – through setting up of gold processing/milling service centres.
On Diamond cutting and polishing, Government will facilitate establishment of more cutting and polishing factories while on base metals (nickel, copper, iron, cobalt) recovery from PGMs, Government is supporting the private sector towards establishment of Base Metal Refinery (BMR).
The Government is also aiming to improve access to international markets, increased productivity, and enhanced liquidity and better pricing of our mineral resources, through establishing the Mineral Commodities Exchange riding on the existing Zimbabwe Mercantile Exchange.
The Finance Minister said the Exchange will provide for both spot market and futures market that enables the trading of mineral commodities on an organised, transparent and regulated marketplace for the benefit of all miners including artisanal and small-scale miners, and the nation at large.