Harare (New Ziana) – Local mining companies expect to increase mineral output this year on the back of firm international commodity prices, putting them firmly on course to achieving the country’s target of a US$12 billion mining industry next year.
For example, gold prices are expected to remain firm in 2022, with the yellow metal currently trading in the range of $1 700 and $1 800 per ounce.
Analysts see gold rising to $1 900 and above later in the year.
However, Chamber of Mines chief executive officer Isaac Kwesu said the projected good performance for the year was dependent on securing adequate power supplies and working capital.
“The prospects on the prices are very attractive but we have to take advantage of it by making sure that we are adequately prepared, we have adequate energy, and we have sufficient capital both open and working capital,” he said.
“It is high time miners take advantage of those prices by producing more.”
Kwesu said miners were prepared to do their best, and pledged sustained efforts to attain the $12 billion revenue milestone.
“But, it requires concerted efforts from the government and private sector to meet this target. The operating environment must be conducive and it must be able to sustain operations as well as expand while also enabling new investors to come on board,” he said.
In 2019, Zimbabwe launched the strategic roadmap to achieve an ambitious US$12 billion mining industry target, as part of the overall plan of transforming the country into an upper-middle-income economy by 2030.
Under the US$12 billion mining roadmap, gold is expected to contribute US$4 billion, platinum US$3 billion, while chrome, iron, steel, diamonds and coal will contribute US$1 billion.
Lithium is expected to contribute US$500 million while other minerals will contribute US$1.5 billion.
Commenting on current capacity utilisation, Kwesu said: “It varies from one mineral to the other, but the average, when we take into account different levels of utilisation, I think it is well above 70 percent but some minerals are below 60 percent while others such as platinum are at 100 percent.”
To support mining sector growth, government last Friday announced that miners would now pay up to 50 percent of their royalties in local currency, a move welcomed by the miners.
The mining industry, which is the largest earner of foreign currency, is critical to Zimbabwe’s economy.
Expansion projects by some mining firms, including Zimplats, Unki and Mimosa and new projects such as Great Dyke Investments and Bravura, all in the platinum sector, are also expected to add impetus to the attainment of the target revenue milestone.
In the coal and hydrocarbons sector, there are several thermal power projects at various stages of development.