MINES Minister Walter Chidhakwa said Thursday Zimbabwe’s mining sector is projected to grow by an average six percent this year, reversing earlier projections of negative growth in the sector.
Chidhakwa told delegates attending a diamond mining conference that the sector had been the most dynamic sectors of Zimbabwe’s economy over the last five years, leading the country’s 2009-11 economic rebound with average annualised growth of 35 percent.
The mining sector contributes 45 percent to the country’s exports and 3 billion U.S. dollars to Gross Domestic Product (GDP).
“The sector is projected to grow by an average of six percent in 2014. Its contribution to the country’s GDP has seen a phenomenal rise from 4 percent in the 1990s to 16 percent in 2013 and a projected share of 17 percent in 2014,” Chidhakwa said.
His projections contradict a -1.9 percent growth projection that was announced by finance minister Patrick Chinamasa in his mid-term fiscal policy statement in September.
Chinamasa projected the negative growth after observing that performance of the sector in the first half of the year had been negatively affected by weak international prices for some minerals, power shortages, obsolete equipment and inadequate funding for recapitalization.
He projected diamond production in 2014 to decline to 8 million carats from 10.5 million carats last year, among other minerals whose production was expected to decline this year.
Meanwhile, Chidhakwa told delegates at the diamond mining conference that Zimbabwe was committed to developing a sustainable diamond industry that places greater emphasis on value addition to its gems.
In this regard, the minister said government was considering reducing and eliminating the 15 percent royalty on diamonds destined for the local market for value addition.
To promote local beneficiation of the gems, government has put a legislation requiring 10 percent of gems produced to be channelled to the local market for value addition.Advertisement