Ian Coles 9 March 2018
HARARE – Zimbabwe has overcome unprecedented change since November 2017,
when new President Emmerson Mnangagwa took office. This political change
has boosted business confidence and caught the attention of the
This change at the top has encouraged a unanimous feeling across the
country and at the conference – Zimbabwe is “open for business”. The
mining sector in particular is one which is drawing lots of positive
The three key components to the development of a successful mining
industry are: prospective geology, human resources and capital.
It is widely accepted that Zimbabwe has the first two. There remains a
chronic lack of capital though, particularly from international sources.
The Zimbabwean mining industry faces many challenges which were
highlighted at the conference:
Many projects in the country have been starved of any form of funding for
over 10 years. Estimates at the conference have suggested that Zimbabwe
will need $7 billion to fund any immediate capital expenditure
requirements if the mining industry is to return to anything like its
The conference also highlighted the issue that mining is a global industry
and many capital providers are already involved in competing projects
across the world.
Finally, many potential international investors have placed heavy emphasis
on the need for Zimbabwe to crack down on the epidemic issue of historic
corruption, deep-rooted within the country. Further emphasis was placed on
more tangible factors such as an out-of-date mining code and uncertainties
over the fiscal regime which also need to be addressed.
So what’s the solution?
At the conference many investors suggested that once the government
organised itself and made steps to crack the institutionalised corruption
the investment will surely follow.
At this stage, Zimbabwean projects should look towards traditional sources
of financial investment to reboot the industry.
This includes the equity markets in London, Canada, Australia and
elsewhere, as well as debt financing from development financial
institutions, other official lenders and commercial banks.
Another option flagged at the conference was the role of SMEs within the
country – it was widely believed that their role would be invaluable in
getting the country back on its feet.
However, some difficulties will lie in making these businesses attractive
to offshore investors, so for now much will depend on the increased
liquidity in the local market as well as funds from international and
Whilst the conference has highlighted the crucial issues within the
Zimbabwean mining industry, the future is something to get excited about.
Investors need to see the tap being turned on to tackle corruption and
update the mining code to encourage business.
If investors can see some of the issues discussed at the conference being
addressed with proposals which have definitive targets and can then see
some concrete results then Zimbabwe will certainly benefit.
Ian Coles is head of Global Africa and Mining Practices.