HomeLocal NewsMining Zim’s growth locomotive

Mining Zim’s growth locomotive

ZIMBABWE’s Mines minister Winston Chitando says government is focussing on mining as its locomotive of growth to pull the economy out of the doldrums and stem the sluggish momentum, while taking advantage of sustained commodity price increases and reduced costs combined with new technology trends which present Africa’s mining sector with the best prospects in over a decade.

In an interview with the Zimbabwe Independent this week on the sidelines of the Africa Mining Indaba in Cape Town, South Africa, and specifically at a special session on Zimbabwe, sponsored by Sukunda Holdings and its business partner the Moti Group, Chitando said a cocktail of measures which include policy and legislative reforms, incentives for investors, intensified investment drive and enhanced exploitation of the country’s vast natural resources will position mining as the engine of growth.

“We want to ensure mining becomes the engine of growth in our economy,” Chitando said.

“At the moment mining is contributing about 15% to GDP (Gross Domestic Product) and accounts for over 50% of the country’s export earnings, but we want to significantly improve that.

“There are a number of things we are currently doing as part of economic recovery and our first 100 days in office. We are pushing policy and legislative reforms and offering incentives for investors. We are also making amendments to the Mines and Minerals Act and ensuring the ministry itself and its bureaucracy become more efficient to bring more certainty and efficiency.”

Chitando said reforms were critical to ensure Zimbabwe’s mining sector improves and boosts the economy.

“We want to improve the ease of doing business in the sector and enhance exploitation of our abundant resources,” he said.

“As part of that we have to revive, utilise and expand some of the existing mining assets; there are low-hanging fruits in the form of ZMDC (Zimbabwe Mining Development Corporation) assets like Jena Gold Mines and Evington Gold Mine that need to be revived; that will take a matter of months to do so.

“There is also the AA Mines (African Associated Mines) that produce asbestos. We need to de-water the SMM mines and resuscitate them. ZMDC is also in ZCDC (Zimbabwe Consolidated Diamond Company) which needs US$187 million recapitalisation.

So investors can come and work with ZMDC, enter into joint ventures or work with the private sector.

“There are a number of initiatives we are working on to ensure mining becomes a major contributor to GDP. There are also many projects and enquiries by investors going on.”

During his address to the mini-conference on Zimbabwe, Chitando spoke about the opportunities that exist in the country’s rich mineral resource base that present lucrative prospects for exploration, mining and beneficiation.

He said while there were a lot of opportunities in gold, diamonds and platinum, there are about four lithium projects in the pipeline, which may see Zimbabwe eventually becoming one of the biggest lithium producers. Officials said there was a mining dump in Matabeleland North with lithium recovery prospects worth over US$1 billion.

There were also references to the ASX-listed Prospect Resources’ Arcadia lithium deposit outside Harare, owned by Australian exploration company Prospect Resources. The company says the pre-feasibility study is complete and the project is on track for development.

Key findings of the report include a 15-year mine lifespan, 15,8 metric tonnes ore reserves and a low start-up capital expenditure of US$52,5 million. The company is also planning development of an integrated lithium chemical plant as it has produced ultra-high purity 99,8% lithium carbonate from its Arcadia ore.

A purity of 99,5% lithium carbonate is required for battery-grade lithium carbonate. As the purity levels rises, more potential product applications become available, meaning price increases. Lithium is critical as it has a lot of applications, ranging from lubricating grease and glass fabrication, to glazes for ceramics, and finally, batteries.

Endowed with the world’s second largest platinum reserves after South Africa, the largest chrome reserves, a billion tonnes of iron ore reserves, large volumes of granite, more than 20 trillion cubic feet of quality coal-bed methane and more than 26 billion tonnes of coal reserves of both thermal and coking coal, diamonds, gold, nickel and other precious minerals, mining experts say Zimbabwe is poised to rise as long as there is good governance, serious reform, policy certainty, rule of law and an enabling operating environment.

While Zimbabwe has great mining opportunities, investors and analysts were also quick to point out that growth prospects could be undermined by the chronic liquidity crunch and cash shortages, high operating costs, antiquated machinery, costs of doing business, high mining fees and royalties, and lack of competitiveness, among other factors. Corruption is also seen as a major threat to investment.

Chitando’s remarks came as Mark Buncombe, group head of mining and metals at Standard Bank, which owns Stanbic Bank in Zimbabwe, told the main mining conference that Africa currently has best growth opportunity in mining in over a decade.

“Given Africa’s rich resource endowment, mining is and will continue to be central to the growth and global integration of African economies as well as a key determinant of the prosperity of Africa’s peoples,” Buncombe said.

“The centrality of mining to the development of the continent means that 2018 is likely to be a watershed year in Africa’s ongoing growth story. For the first time in a decade most commodities, bar platinum, have seen significant price recovery. At the same time miners have done a lot of work cutting costs with margins, globally, on the increase.

“While the protracted absence of investment in prospecting will weigh on the industry for many years to come, reduced debt levels mean that going into 2018 balance sheets are generally stronger too. While the volatility of recent years means that many companies are reluctant to spend, where real risk-managed opportunities present themselves in Africa investment is taking place.”

Experts and analysts say countries like Zimbabwe must ensure political stability and policy certainty to join the group of nations which have made the most out of their resources.

“Those countries offering stability and a degree of political certainty are likely to benefit most,” he said.

“Some countries in Africa have learned that the right legislation can achieve national development goals by creating a fair, responsible and conducive environment for foreign investment.

“Those markets — like Botswana, Namibia and increasingly Ghana, Cote d’Ivoire and Zambia, for example — that have developed balanced legislative regimes cognisant of the industry’s long investment cycles while also talking to local national development goals, are likely to attract global interest.” — Staff Writer.

JUDICIAL Service Commission (JSC) secretary Justice Rita Makarau has stepped down from her post with immediate effect.
Sources in JSC say Makarau, who was pushed out of her position as Zimbabwe Electoral Commission chairperson in December, threw in the towel after enduring a series of frustrations at the commission.

Makarau reverts back to the bench where she will serve as a Supreme Court judge. The Zimbabwe Independent in December reported that there were moves to push Makarau out of JSC.

A senior official in the judiciary that time said she was being targeted because of her perceived close links with former president Robert Mugabe.

The JSC position is important because it deals with the administrative affairs of the country’s judicial system and issues to do with salaries and the administration side of court cases.

In a statement released late yesterday the JSC said Makarau requested to step down as acting sectary and to return to the Supreme Court bench.

“At its meeting of 8 February 2018, the Commission resolved to accept Justice Makarau’s request to step down as acting secretary and allow her to resume her duties as judge of the Supreme Court and Constitutional Court with effect from Monday 12 February 2018,” reads the JSC statement.

The Commission said it was resolved that Walter Chikwana will be the acting secretary until further notice while the rest of the JSC secretariat remained unchanged until further notice.

During the race to succeed the late retired chief justice Godfrey Chidyausiku, Makarau was the preferred candidate of Zanu PF’s G40 faction which had coalesced around former first lady Grace Mugabe. President Emmerson Mnangagwa’s faction — which eventually won Zanu PF’s protracted succession battle with the help of the military — preferred Judge President George Chiweshe.

Mugabe eventually appointed Chief Justice Luke Malaba, who came out tops in interviews conducted by the JSC with a score of 91%. Makarau scored 90% in the public interviews.

Recent Posts

Stories you will enjoy

Recommended reading