HARARE – Government needs to partner private mining players in its mineral exploration initiatives, says mining experts.
This comes as Zimbabwe’s Chamber of Mines has said the country lags behind in exploration, without having invested in the fundamental mining activity in the last decade.
If leveraged to maximum capacity, the country’s mining sector has the potential to generate $14 billion annually by 2018, according to Finance minister Tendai Biti.
However, exploration is capital intensive, and the government cannot afford.
“Exploration is an expensive business and it should be opened up to private business. Government cannot go alone on this one,” said Lovemore Chimuka, a mining exploration expert.
Chimuka said government’s responsibility should be limited to providing an enabling environment.
“The Democratic Republic of Congo is an example of how government cannot go alone in exploration activities. Government’s role, through the geological survey, has the duty to keep mineral resource database and inventory for investors,” said Chimuka.
He added that apart from partnering investors with the required capital, sophisticated equipment is also needed.
“The Russian government fund their exploration programmes through research and development models which where inherited from the USSR era. This model does not work anywhere else, even in advanced economies like USA,” said Chimuka adding that the way to go in our case is through Public Private Sector Partnerships (PPPs).
He further said the activity is also time consuming, taking up to 10 years.
Chimuka also said the government would also need skilled personnel.
Currently, one of the major challenges Zimbabwe’s mining sector faces is brain drain.
“It is unfortunate that the lack of adequate and spot on skills in mining exploration has severely affected progress. Going forward the country needs to retain skilled labour. We are definitely short of experts such as geophysicists who have left the country for greener pastures,” he said.
Eric Bloch, a leading economist, also said that foreign investors were more than willing to invest in Zimbabwe’s exploration and mining industry, but they want security on their investments.
“Investors can only come if the environment is secure enough. Private and public sector partnerships in mining exploration can only happen provided that government can be credible enough,” said Bloch.
Although government has poured in $4 million to intensify efforts to harness the country’s mineral resources through the re-establishment of Mining Promotion Corporation under the ambit of Zimbabwe Mining Development Corporation (ZMDC) to spearhead mineral exploration activities, much more is required.
Meanwhile, industry experts say Zimbabwe’s diamond production could double the current global output by 2015 and easily contribute 25 percent of the world’s supply by value and 30 percent by volume.
ZMDC chairperson Godwills Masimirembwa recently announced that government had already done preliminary exploration in Marange, which proved there were more deposits of the precious stone in the 1,8 million hectare area.
According to a mining report released recently by the Business Monitor International (BMI), Zimbabwe’s mining sector is set for rapid development.
The country is richly endowed with deposits of chrome, gold, nickel and platinum, among other minerals.
Its gold reserves are among the largest in Africa, while it holds the second-largest known platinum reserves in the world after South Africa.
However, analysts say there could be renewed weakness in the short-term in the mining sector output, as the country implements its indigenisation policy, which could see foreign-owned firms scaling down investment in the country. – Kudzai Chawafambira