Mining sector requires $4bn

via Mining sector requires $4bn October 15, 2015

CHAMBER of Mines of Zimbabwe president Toindepi Muganyi says the mining sector requires in excess of $4 billion over the next five years to achieve full capacity and to fund expansion projects.

Speaking at the Zimbabwe Mining and Infrastructure Indaba 2015, Muganyi said the government was relaxing and amending some regulatory, fiscal and tax laws in the light of mining viability challenges and growth stagnation and there was convergence in the platinum group metal (PGM) resources beneficiation conversation.

“The mining industry requires in excess of $4 billion over the next five years to achieve full capacity, and to fund expansion projects. Platinum requires $2,8 billion to produce 22 tonnes by 2020, gold requires $0,6 billion to produce 30 tonnes, coal requires $0,42 billion to produce 18 tonnes, chrome requires $0,038 billion to produce
1 300 000 tonnes, and nickel requires $0,028 billion to produce 27 tonnes by 2020,” he said.

Muganyi said there was a significant increase in the contribution of the small-scale sector in particular gold linked to mobilisation efforts.

He said while gold, PGMs and diamonds contributed more than 80% of mineral revenue, the decline in volume of diamonds would have a significant impact to mineral revenues apart from price.

He said the impact of infrastructure and power outages was more severe in a declining commodity price environment and the current fiscal and tax modelling reflected a strong correlation of mining sector performance and contribution to new capital.

Muganyi said the top three minerals in terms of production in the period between January to August were gold, platinum and nickel. Gold recorded 12 324 tonnes, platinum recorded 7 874 tonnes and nickel recorded 10 286.

Commenting on the mining sector’s contribution to the economy, he said 10% of Gross Domestic Product had been coming from the sector which generated $9 billion since 2009.