Mining sector needs $7bn

Published: 25 February 2018

ZIMBABWE's mining companies need over US$7 billion to recapitalise their operations over the next five years to raise production and reach optimum capacity.

It is expected that when fully capitalised, the industry will generate $18 billion from exports annually and create hundreds of thousands of jobs in the process.

According to a State of the Mining Industry latest survey report, the sector is encountering difficulties in raising requisite capital to ramp up production, challenges the new Government is working flat-out to address.

Zimbabwe has 60 mineral occurrences, according to official Government reports, the major ones being diamond, platinum, gold, nickel and lately lithium, among others, that can be fully exploited for quick economic turnaround.

The Chamber of Mines of Zimbabwe said the sector, which has been devoid of meaningful investment over the past two decades, needs the fresh capital investment to ensure that positive growth and viability is maintained.

Government has singled out the mining and agriculture sectors as keys to future economic development for the country. To ensure maximum benefits, value addition before exporting must be prioritised.

The mining sector is also expected to increase its contribution to the country's total export earnings to above 69 percent from 60 percent in 2016 and 69 percent in 2017 and its contribution to economic growth will anchor discussions during the Mining Investment Conference.

Reads part of the report: "In 2017 State of Mining Industry Survey, the mining industry requires in excess of US$7 billion in investment in capital for sustenance and the growth of the industry. It is important to realise the requirement for investment in infrastructure that supports growth in mining."

It is believed that US$2 billion will be channelled towards gold production with platinum taking US$2,2 billion, ferro chrome US$400 million, nickel US$350 million, coal US$400 million and diamonds US$500 million.

As such, most minerals are expected to record increased output in 2018, compared to 2017.

The report revealed that production could have been higher with the provision of better power supplies, funding and reliable equipment.

"In 2018, the mining sector is expected to record an output boom, with survey findings showing that 90 percent of respondents are planning to increase output by more than 10 percent, catapulted by increased capitalisation."

The future looks very bright as the mining houses move to reduce costs of production.

It will also move towards aggressive value chain optimisation to reduce excessive use of consumables.

Due to a rebound in commodity prices, coal, gold, chrome, iron ore, nickel, and diamonds are expected to be the main attractions this year.

- zimpapers

Tags: Mining,