THE Minerals Marketing Corporation of Zimbabwe (MMCZ) says it expects mineral receipts to increase by about 500 percent in the next five years to US$6 billion from the current US$1,2 billion.
The State-run minerals marketing agency said it was currently in the process of engaging with small-scale miners to ensure that it meets its 2018 target.
The sector has continued to be the major driver of economic growth in the country Zimbabwe, contributing an estimated 13 percent to GDP in 2012 and is projected to grow by 5 percent this year, maintaining its position as the country’s fastest growing sector.
In a review of mining receipts to the country on Tuesday, MMCZ said it was targeting an increase from US$1,2 billion to US$6 billion.
The Chamber of Mines estimates that the sector requires US$6 billion for the recapitalisation with most of the funds needed to refurbish processing plants, equipment and machinery.
Despite its reputed mineral wealth, Zimbabwe has not always been top of the list as an investment destination for mining companies.
Industry observers say this is due to a perceived unattractive operating environment coupled with inadequate infrastructure, the government’s failure to listen to miners’ suggestions and of late, the controversial indigenisation law.
Chamber of mines immediate past president Winston Chitando said despite Zimbabwe being blessed with mineral resources, the sector was under attack from policies that hinder development.
He said the “economics” of the country need to be right if investors are to flood Zimbabwe and benefit the country.
“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,” Chitando told the Chamber’s recent AGM
Chitando said some of the “economic” issues that need to be addressed include power cuts, electricity tariffs, diamond policy that stimulates growth and attracts investment, investor friendly mines and minerals act, value addition, reviewing mining fees and charges and implementation of the indigenisation policy.
Miners say Zimbabwe has even missed out on benefitting the firm prices for mineral commodities that have been driven by demand arising from industrialisation in Asia over the past two years.Advertisement
Mines minister Obert Mpofu has also emphasised the need for significant investment in exploration for the sector to realise its full potential as a major economic driver and employment creater.
“Despite the availability of geotechnical information, the country remains largely under-explored,” he said.
“To address this we are putting in place modalities for the establishment of an exploration company which will conduct exploration activities and build an inventory of bankable mining projects that can be marketed to investors, both domestic and foreign.
“It is there only to make sure that the broad-based empowerment of the majority of Zimbabweans is achieved. What happened on the land will not be replicated at the mines. That is the correct government position.”
Mpofu said Zimbabwe was the only country in the world that has not benefited from its own resources.
“Everything in Zimbabwe has been taken in its raw form. If we were allowed to sell our diamonds we would not be talking about International Monetary Fund and the debt. We have enriched foreigners and neighbours,” he said.