Investors express massive interest in Zim mining sector

INVESTORS attending the African Mining Indaba in Cape Town, South Africa, this week expressed massive interest in investing in Zimbabwe’s mining sector — an engine of potential upswing in economic recovery — in a continued breath of fresh air on the country’s prospects and confidence in its future.

Staff writer

The mining conference gave impetus to the momentum the country recently gained in a bid to attract investment during the World Economic Forum meeting in Davos, Switzerland, last month following a change of government in November 2017.

Zimbabwe had for years been a cauldron of political and economic turmoil, as well as a sustained negative investment climate under former president Robert Mugabe’s disastrous rule, which came to a crashing end in a military coup last November.

Addressing a mini-conference on Zimbabwe on the sidelines of the main indaba, which was attended by mining investors, executives, global professionals, analysts, fund managers, investment specialists and governments’ representatives, Zimbabwe’s Mines minister Winston Chitando said on Tuesday the country has great opportunities for investors due to its vast natural resources, current policy shift and the changing operating environment.

“It has been said here and elsewhere before that Zimbabwe is open for business,” Chitando said. “There are massive opportunities, especially in mining. We have over 40 different minerals in the country, including diamonds, gold, platinum, chrome, copper, nickel, iron ore and lithium. The country also has rich coal deposits and many other minerals. Research shows that Zimbabwe has six out of 10 of the world’s most valuable minerals. This massive resource base creates lucrative opportunities for investors in exploration, mining and beneficiation. So we are open for business.”

Chitando also explained to delegates how investors could secure mining title in Zimbabwe.

“There are four ways to start mining in the country,” he said. “The first one is through getting mining claims, the second is by getting a mining lease which involves consolidating claims which are contiguous, the third is securing a special mining lease where the investor puts a minimum (US$100 million) in capital and the fourth through a special grant usually issued for 25 years, especially in relation to the energy sector.”

Chitando further said investors could enter the Zimbabwean market through three different ways.

“There are three potential ways of entry; it can be done by partnering state-owned enterprises, for instance working with the Zimbabwe Mining Development Corporation which has a lot of mining assets, not brown fields but operating entities, investors can also enter into joint-ventures or partner operating private companies.”

The minister added: “There are also value-addition investment opportunities in various industries, including manufacturing lithium chemicals and batteries, cement (from limestone), jewellery from gold, diamonds and platinum, as well as gemstones and other semi-precious stones. There are potential opportunities in steel manufacturing using iron ore, nickel and chrome, as well as conversion of coal to liquid fuel and the use of coal in generating electricity for both domestic use and export.”

He said Zimbabwe’s mineral resources are under-explored, thus there are vast opportunities for investors with interest in exploration.

Zunaid Moti, chairman of the Moti Group, a diversified company which has interests in financial products, transport and logistics, aviation, motor vehicle trading and finance, property development, security services and mining, among other sectors, said he took a huge risk to enter the turbulent Zimbabwean market at a difficult time when investors were taking flight or sitting on the fence in 2014 and it paid dividends.

Moti said he learnt that the best way to navigate difficult environments was through networking and building relationships with various stakeholders, including government.

“We have built professional and business relationships in Zimbabwe, with the new President (Emmerson) Mnangagwa who has been humble and helpful to us and his team,” Moti said at the event sponsored by his group’s subsidiary African Chrome Fields (ACF) and its business partner Sakunda Holdings.

“In business, building relationships is critical; relationships with the government, the people and the markets. We want to see Zimbabwe change, getting investment, creating employment for its people and getting revenues for development.”

Moti said he has diversification and expansion plans with his Zimbabwean business partner Kuda Tagwirei, the boss of Sakunda Holdings, which is involved in energy, logistics, and trading businesses in Zimbabwe.

Moti said: “This is my advice, build relationships with the government. There is nothing that can’t be solved through conversations — it is truly open for business in Zimbabwe when the Head of Government invites you in for tea to talk about your interest in the country. The invitation is open to look at Zimbabwe in the positive light it deserves.”

ACF national project director Ashruf Kaka, who is also the chief executive of the Moti Group, said while Zimbabwe is endowed with mineral wealth its greatest asset though is not the natural resources, but human capital.

“Zimbabwe’s natural resources are well-documented, but the country’s real asset are its people; knowledgeable, well-trained and hardworking. The new government led by President Mnangagwa has brought new hope, shackles of the past are being removed and a new dispensation is setting in. The new leaders acted decisively faced with a very difficult situation,” Kaka said.
“A few months ago, you could not have imagined us gathering like this and having this sort of discussion because there was no confidence in Zimbabwe and its leadership. But us as a company, led by our chairman Moti, took a leap of faith to invest in Zimbabwe when no one really wanted to and today we have been rewarded.

“We have invested over US$200 million in our chrome project, we are employing about 1 000 people, mostly Zimbabweans, except a few experts from South Africa, and we are getting good rewards. We have a very good business model. Our shareholders — the Moti Group and Sakunda Holdings — want to diversity and deepen their interests in Zimbabwe. To us, therefore, there is no question that Zimbabwe is open for business.”

Tshepo Mahloele, chief executive of Harith General Partners, financiers and developers of infrastructure projects in Africa, said timing and longevity were key to meaningful investment.

“Timing is very important in investment issues. The environment is also important, but in the bigger scheme of things it is about being there for the long haul, it is also about policy issues, rule of law, utilities like the supply of power and such other critical factors,” he said. “I was supposed to have gone to Zimbabwe last week, but I could not because of this conference, so I will be going there to look for opportunities next week. We are interested in infrastructure projects, energy, transport and information and communication technology areas.”

Morning Tide Investments boss Rafiq Bagus said government policies should deal with the issues of inclusivity in mining to ensure broader participation in resource exploitation and empowerment.

Victor Kgomoeswana, author of Africa is Open for Business, who was the moderator of the event, said the work ethic of Zimbabweans and resourcefulness — combined with the depth and breadth of what Zimbabwe has — should be a magnet for investors.

“Nobody could have predicted that Zimbabwe would be where it is today, but the changes that took place in November 2017 put the country on an irreversible bullish trajectory,” he said. “It is early days yet, but the horizon looks much more promising for Zimbabwe than it did a few months ago. And if it looks optimistic for Zimbabwe, it should look optimistic for the Sadc region and also for Africa.”

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