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Mineral exports seen reaching $2.4bln
03/03/2014 00:00:00
by Business Reporter
 
Minieral exports to grow ... Mining minister Walter Chidhakwa
 
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ZIMBABWE’S mineral export receipts are projected to reach US$2,4 billion dollars this year due to firming global prices, huge capital injections and commodity beneficiation.

Despite being endowed with a fair share of the world's mineral resources, Zimbabwe has not always been top of the list as an investment destination for mining companies.

The country’s potential has been undermined by an unattractive business environment due to poor governance, coupled with inadequate infrastructure, government's failure to listen to miners' suggestions and of late, the controversial indigenisation law.

According to figures made available on Monday by the Mineral Policy Study carried out by the Zimbabwe Policy and Research Unit (ZEPARU), a combination of anticipated firming global prices, huge capital injections and commodity beneficiation will lead to a rise in earnings from US$1,86 billion last year to US$2,4 billion in 2014.

The mining sector contributes 13 percent of the country’s gross domestic product.

Analysts say if key challenges such as inadequate capital and energy supply constraints are solved, Zimbabwe can derive maximum benefits from the industry.

For this to be achieved mining companies need to operate profitably like any other company. But it is the economics of the country that must be correct if profits are to be achieved. Economics will determine the extent and level of resources to be extracted.

Some of the "economic" that need to be addressed include power cuts, electricity tariffs, diamond policy that stimulates growth and attracts investment, an investor friendly mines and minerals act, value addition, reviewing mining fees and charges and implementation of the indigenisation policy.

The study says gold production, which reached an average of 14 tonnes last year, raking in more than US$800m, is projected to increase to 18 tonnes at a value of US$900m depending on the international global prices for the yellow commodity.

Platinum production, which was at 10,2 tonnes last year, earning US$500m, is also anticipated to increase this year to 13 tonnes worth US$750 million.

Nickel production was at 7,8 tonnes fetching US$110 million last year and is expected to reach 10 tonnes at a value of US$235 million by December 2014.



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The study says Zimbabwe also has the potential of earning US$800 million annually if it cuts and polishes its rough diamonds.


 
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