US$12bn mining industry achievable
WHEN President Emmerson Mnangagwa in October last year launched a roadmap to achieve a US$12 billion mining industry by 2023 most people and economic analysts dismissed it as a highly ambitious statement of intent.
The roadmap was described as hollow on how such an ambitious project could be accomplished. It was described as long on ambition, but thoroughly short on the implementation matrix.
The roadmap said from the targeted US$23 billion extractive industry, gold will contribute US$4 billion, platinum group metals US$3 billion, diamonds US$1 billion, chrome/iron ore/steel US$1 billion, coal/hydro carbons US$1 billion, lithium US$500m, and others US$1,5 billion.
To achieve the 2023 target, the country needed to be mining annually 100 tonnes of gold, 2,4 million ounces of platinum group metals, 1,2 million tonnes of chrome/iron ore/steel, 11 million carats of diamonds, 25 million tonnes of coal, and from other minerals.
The roadmap was never given a chance to succeed. But over a year after the launch, there is optimism that the mining sector would soon experience a boom in production, especially next year.
The latest Chamber of Mines of Zimbabwe survey shows that most mining houses would ramp production next year, with average capacity utilisation expected to increase from 61 percent this year to a five-year record of 80 percent.
This shows that the sector is on course to achieve the US$12 billion revenue mark by 2023 as envisaged by the government. With increased funding, electricity and revamping of the country’s rail system, some of the key
fundamentals, the nation would certainly achieve the set target.
Though statistics show that the country’s total exports in 2018 were approximately $4 billion, of which approximately $3,2 billion was from mining, to record growth in mining exports of 400 percent by 2023 seems impossible, there is new measure of optimism that the nation, due to economic reforms, will be able to unlock the flow of both local and foreign capital into the sector.
There is a need for significant investment into exploration and purchasing equipment for extraction, processing and value addition. The current foreign currency retention and surrender requirements will need to be reviewed to make the sector an attractive investment destination.
Policies that focus on the training, organising and mechanisation of small-scale miners could unlock further growth. Artisanal miners should be turned into proper miners who are licensed and trained to mine lawfully and in an environmentally-friendly manner.
Let’s keep on dreaming