THE mining sector’s growth rate is projected to increase to 16,7% despite government revising downwards the economic growth target for this year due to underperformance of the other key sectors of the economy, Finance Minister Tendai Biti said.
Presenting the mid-term policy statement review this week, Biti said the mining sector would continue to grow and surpass the previously projected growth of 16%, buoyed largely by positive performance of gold and platinum, despite fluctuating global mineral prices.
Gold prices closed the year 2011 at around US$ 1 662 per ounce, rose to US$1742,6 per ounce in February 2012, before marginally dropping to an average US$1 650 up to June.
Platinum prices hovered between US$1 506 – US$1 655 per ounce during the first quarter, before gradually softening to US$1 458 and US$1 443 per ounce by May and June 2012, respectively.
Other key minerals also driving the sector were palladium, whose output was expected to marginally increase to 9 600 tonnes, compared to 8 800 tonnes previously projected, while chrome would rise to 750 000 tonnes from 620 000 tonnes.
The diamond sector, which has largely been blamed for poor remittances to the fiscus, is however projected to increase output to 12 000 carats, up from 9 000 carats, while coal output is expected to drop by 21,9% to 2 million tonnes.
Biti said the long overdue amendments to the Mines and Mining Act were expected to be finalised by end of this year and this was expected to improve the sector’s operations.
He said as part of enhancing local beneficiation of natural resources, government would continue to work on the recapitalisation of Fidelity printers to enable it to refine gold.
“Fidelity should embark on gold refining and also seek for accreditation with the London Bullion Market Association” said Biti.
The minimum annual gold output required to join the association was 10 tonnes and the country’s output since 2010 has been in excess of this threshold.
Gold refining would enable Fidelity to capitalise on the existing infrastructure built over the years and also add value to the mineral,which is currently being exported in its raw form.
Biti said government was looking for potential investors to raise US$50 million to finance the refining of 1 100 kg of gold per month of per month.