CAPITAL constraints, erratic and costly utilities as well as government’s policy inconsistency are expected to come under spotlight at the Chamber of Mines of Zimbabwe’s (CMZ) annual general meeting which started yesterday in the resort town of Victoria Falls.
The CMZ’s annual general meeting comes at a time the value of the country’s total mineral output declined by 3,45% to US$419,96 million in the first quarter of 2016.
Zimbabwe’s mining industry is under pressure due to depressed international commodity prices, depreciating regional currencies and lack of access to affordable funding.
“Though we have seen some improvements in the energy sector, we anticipate that the energy sector will remain fragile. There is need for a guaranteed fair tariff in the mining sector to ensure that industry remains afloat,” CMZ CE Isaac Kwesu told a press conference on Tuesday this week.
The mining industry representative body last year pushed for the importation of 300 megawatts of electricity from South Africa to boost mining activities as power outages was severely affecting production. The country’s electricity supplier Zesa is proposing a 14% tariff increase from the current 9,86 cents to 11,2 cents per kilowatt per hour (KWh).
“No increase has been affected as yet. This conference will need to find out what is required per sector, we have to be careful on what tariff are you effecting. Gold miners are currently paying 14 cents (KWH),they are paying at a premium while others are paying 10 cents .We are happy for a unified tariff,” Chamber of Mines’ vice-president Batirai Manhando said.
Gold output recorded a 17% increase in value from US$161, 67 million generated in the first quarter of 2015 to US$189,65 in the same period this year.
The country recorded five tonnes of gold during the first quarter up of 2016 from four tonnes last year, with the chamber projecting 24 tonnes by year end.
The average bullion prices for January was at US$1097,38 12,3% lower than that of the corresponding period of 2015.However, by March 2016, average gold price was 5,7% higher than the same period last year.
Platinum was up 6% to US$108,97 million in 2016 compared to US$102,65 million in 2015.
Platinum output was four tonnes in the first quarter from three tonnes last year with the Chamber envisaging 17 tonnes by end of 2016.
Platinum group metal prices trended upwards during the first quarter of 2016; however, the average monthly prices for the first quarter of 2016 were lower than those for the corresponding months of 2015.
“The mining industry recorded a robust performance in the first quarter of 2016 compared to the same period in 2015, with the majority of minerals recording stellar output. Apart from chrome and coal, all major minerals recorded increases in volumes produced ranging from 8%-64%,” Kwesu said.
He said the conference, being held under the theme “Revive, Accelerate and Sustain Growth”, and will adopt a sectoral approach covering key minerals such as gold, platinum, diamond and base metals. It will also outline the critical success factors to achieve the growth target interventions required to put back the industry on a growth trajectory.
Kwesu said the production of iron ore, asbestos, chrome and coal requires incubation approach following depressed output over the last four years.
Nickel output was four tonnes in the first with projections set at 16,5 tons end of year.
Capacity utilisation for coal, chrome, diamond was pegged at 28%, 30% and 43% respectively as at end of last year.
Last October the chamber said for the next five years the sector require US$4 billion for capitalisation. The platinum sector requires US$2,8 billion, while gold requires US$600 million and coal US$420 million.
About US$28 million is needed for nickel and US$38 million for chrome.