LocalNews

Mining remains Zimbabwe’s top forex earner

By Business Reporter – Monday 5 August 2019

HARARE (Mining Index) – THE mining sector has remained Zimbabwe’s leading foreign currency earner, contributing US$1.3 billion, representing 68 percent of the total exports of US$1.9 billion recorded during the first half of 2019.

This was revealed by Finance and Economic Development Minister Mthuli Ncube during the mid-term budget review.

The sector has not only been Zimbabwe’s top source of employment accommodating 45 000 formal employees, but has played a pivotal role as a source of livelihood to over a million small scale and artisanal miners involved in gold and chrome mining.

Albeit leading the pack in performance, Zimbabwe’s mining sector was not spared by power cuts lasting up to 18 hours a day, greatly affecting output, forcing companies like Bindura Nickel Corporation (BNC) to import power directly from Mozambique.

“The sector, which experienced recovery during the first quarter of 2019, apparently faced headwinds during the second quarter, as evidenced by output losses in most major minerals such as gold, platinum, palladium, diamonds, nickel, chrome and coal. The major constraints are being imposed by foreign currency shortages and the intermittent electricity supply,” said Ncube.

He added that the current setbacks are temporary with expected recovery in the short term on the back of firm international prices and envisaged improvements in power and foreign currency supply.

During a post cabinet briefing held on July 31 2019, Information, Publicity and Broadcasting Services minister Monica Mutsvangwa announced that the Zimbabwe Electricity Supply Authority (ZESA) had started accessing additional 300MW during off-peak hours through the Southern African Power Pool under a US$2 million facility mobilised by ZETDC while negotiations are underway to import approximately 400 megawatts (MW) from Eskom in South Africa.

Ncube announced new electricity tariffs, but maintained the old tariffs for ferrochrome smelters and other miners at US$0.067/kWh and US$0.0986/kWh respectively, ensuring the resources are ring-fenced in a Special Account solely for purposes of importing electricity.

Government has opened up the economy to private investment in which it has concluded a number of investment agreements with a 10 year gestation period.

“Government will, therefore, in the second half of the year unveil a comprehensive strategy and roadmap towards a US$12 billion mining industry by 2023. The attainment of this milestone is not an event but a process, which is well underway with concrete start-ups and expansion of projects in a number of minerals, which include platinum, gold, ferrochrome, coal and hydrocarbons, lithium, diamonds, iron ore, among others,” said Ncube.

Under the Gold Mobilisation Facility, government is putting in place a Gold Finance Facility to capacitate Fidelity Printers and Refiners (FPR) to buy gold from gold producers using one approved system for all gold purchases.

Government has however maintained the 55 percent gold retention by gold producers in their Nostro accounts while the 45 percent is paid in Zimbabwean dollars. ENDS//

 

 

 

 

 

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