MINING is now contributing 11 per cent to the country’s GDP and plans are underway to reopen closed mines and push value addition to ensure the country optimises benefits from its mineral wealth.
Presenting his mid-term fiscal review Wednesday, Finance Minister Tendai Biti said mining now makes up 50 per cent of the country’s total export earnings adding there was “potential for generating substantial benefits and revenues to the economy”.
“Mining contribution to our economy has almost trebled from 4% between 1999 and 2008 to current levels of close to 11% of GDP,” he said.
“Key minerals, which underpin the sector and their respective projected outputs in 2012 are Gold (15 tons), Platinum (12 tons), Nickel (8,800 tons), Coal (2 million tons), Chrome (750,000 tons), Palladium (9,600 tons), and Black Granite (170,800 tons).
“The sector also contributes over 50% of total export earnings, 45,000 formal jobs, with informal small scale mining also contributing substantial numbers.”
Mining has been one of the key drivers of economic recovery since 2009, taking advantage of the introduction of dollarization as well as a raft of liberalisation measures by the government.
However, several companies are still not operating after either closing down or scaling activities back to care and maintenance as the economy battled hyperinflation and foreign currency shortages in the last decade.
Biti said the government would now focus on helping revive these companies which include fairly large companies such as Mashava and Zvishavane Asbestos Mines, Bindura Nickel Mine, Kamative Tin Mine, Buchwa Mine, Zimbabwe Alloys as well as about seven more gold mines.
“The country stands to benefit a lot in terms of employment, incomes, fiscal revenues, among others by resuscitating a number of closed and distressed mines located in various parts of the country,” he said.
“These mines were mainly affected by the decade long crisis of 2000 to 2008 and also the global financial crisis which dampened global demand and in some instances, prices.
“In the case of Bindura Nickel Mine, Government has accorded the company National Project Status and accordingly extended fiscal incentives, which will allow duty free importation of equipment, thereby facilitating the resumption of operations before the end of year.
“Similar and other appropriate approaches will also be considered in respect of other closed and distressed mining companies in order to facilitate the resumption of operations, that way ensuring that the country benefits fully from its natural resources.”
Biti said efforts must also be trained on value addition to “enhance benefits to the economy in the form of higher export earnings and employment opportunities”.
Having already banned exports of unprocessed chrome, the government would now seek to encourage diamond polishing and cutting, refining of gold and platinum refining, ferrochrome as well as black granite cutting and polishing.