Miners upbeat despite tough operating conditions
IN SPITE of the harsh economic environment, a Chamber of Mines of Zimbabwe (CoMZ) survey has shown that most industry players are upbeat about prospects for the coming year.
In its sixth edition of the State of the Mining Industry Report, researchers commissioned by the Chamber established that the majority of mining houses surveyed have plans to increase production next year.
“Most mines (90%) are planning to ramp up production in 2021, while 10% expect to remain the same,” noted the researchers who were led by respected University of Zimbabwe economics lecturer, Albert Machekano.
“Of the respondents that are expecting to increase production, approximately 40% are expecting to ramp up production by more than 30%. About 10% expect to increase output by between 10% and 30%”.
The optimism is also reflected in the Mining Business Confidence Index, which measures sentiment in the resource sector.
Whereas the previous score was +2.2 for the current year, the index for next year significantly improved to +3.1. This means that overall, the industry is highly confident about the future with most respondents surveyed planning to improve capacity utilization next year.
The average capacity utilization for the industry is expected to increase from 61% this year to a five-year record of 80% in 2021. Apparently, this also shows that the sector is on course to achieve the US$12 billion revenue mark by 2023, set by Mines and Mining Development Minister, Winston Chitando.
CoMZ president, Elizabeth Nerwande, lauded the survey for producing quality data, which has previously proved to be on point.
She said having identified information asymmetry as a major barrier in the engagement between industry and regulatory authorities, the Chamber has over the years worked tirelessly to bridge information gaps that have existed, with the Mining Industry Survey emerging as the leader in enhancing the Chamber’s capacity to have updated information in a bid to remove the information asymmetry.
“As has been the case with past surveys, it is directed to all mineral producers large and small, and the sample size provides confidence in the adequacy of the data and findings of the survey. We continue to work at expanding the sample size and to include all aspects of the mining value chain. The ultimate objective is to have all registered mineral title holders participate in the survey.
“The four key facets in mining are mining titles management; fiscal regime for mining; monetary framework and infrastructure to support mining…We trust that these findings will continue to provide relevant insights and trends that are necessary in policy formulation, and will support the ease of doing business reform agenda that government is passionately pursuing. We remain hopeful that the research findings will be useful in informing policy where it is needed in the quest to achieve the aspired vision of US$12 billion by 2023,” said Nerwande.
The survey comes at a time when the mining industry has not been spared by the Covid-19 pandemic. According to Nerwande, the sector has had to rearrange itself to remain in business.
“We are grateful to the government for according the mining industry a critical sector status which enabled us to continue operating even at reduced levels, without however shedding jobs. This allowed the mining industry to continue to generate the foreign currency which the nation desperately requires,” she said.
The mining sector contributes about 8% of the country’s gross domestic product and has set a target of generating US$12 billion revenues by 2023 from as little as US$2.7 billion in 2017.
Latest statistics shared by the Governor of the Reserve Bank of Zimbabwe, Dr John Mangudya, indicate that the industry’s exports rose by 14% to US$2,4 billion between January and September this year, compared to the same period last year.