, pub-3787448768440954, DIRECT, f08c47fec0942fa0 [google-translator]

Zim sees massive platinum rebound

ZIMBABWE’s government this week projected a healthy growth rate in platinum output during 2022, confirming positive sentiment by a new authoritative report, which projected stronger foreign direct investment (FDI) inflows across minerals.

Mines and Mining Development deputy minister Polite Kambamura said platinum miners saw their contribution to mineral revenue rise to almost 50% last year.

He said growth was driven by a positive response by investors to several policies unveiled in the past five years.

“Government policy interventions are yielding positive results as evidenced by the number of investors flocking into the country,” Kambamura said.

“We have seen several new mining projects coming on board under the new dispensation. International companies like Alrosa and Tsingshun have set bases in the country for diamond mining and steel production respectively. It is after policy reviews that we have seen closed mines re-opening and existing mines ramping up on their production,” he said.

Zimbabwe has three key platinum group metals (PGMs) miners extracting the resource.

These include Zimplats, a unit of the Johannesburg Securities Exchange-listed Impala Platinum, together with Sibanye Stillwater’s Mimosa Mining Company and Unki, a unit of Anglo American.

PGM firms have been working on establishing a local base metal refinery, along with a precious metal refinery.

At the end of last year, Australian Stock Exchange-listed Zimplats, the country’s biggest producer, announced a plan to inject about US$1,8 billion towards the refinery.

“We are on track to increase platinum export receipts due to the current expansion drive and ramping up of production at all platinum producers. Last year, platinum contributed 48,1% or US$2,4 billion of the total mineral exports which is a 20% increase from the same period in 2020. This has seen new players like Great Dyke Investments, Karoo Resources and Bravura coming into the sector, an expansion drive on existing mines,” Kambamura added.

However, in a new report released on Tuesday, researchers at the leading advisory, InterHorizon Securities (IH), said President Emmerson Mnangagwa’s administration also implemented radical policy shifts that cost the country US$500 million in potential investments.

Most of the loss emanated outside the mining sector, according to the IH report.

In an analysis of FDI trends during the four years since Mnangagwa took power in November 2017, IH researchers said the regime garnered tremendous goodwill as it undertook to reverse a sea of growth inhibiting policies that were in force under strongman Robert Mugabe’s 37-year grip on power.

But a decade-long crisis spiralled out of control when the Reserve Bank of Zimbabwe and the Ministry of Finance, under pressure to end worsening hardships and de-industrialisation, pushed through currency changes, giving the Zimbabwe dollar a bigger presence over foreign currencies in transactions.

IH’s paper showed FDI hit a peak of US$745 million in 2018, before coming off 62,4% in 2019 to US$280 million, as the economy battled to come to grips with the hasty changes.

IH said investment plummeted further by 30,7% in 2020, as the economy came under pressure from the 2019 currency changes, along with hyperinflation and foreign currency shortages.

Inflows were projected to have slid further by 22,68% to US$150 million at the end of last year, according to IH.

“According to preliminary government estimates, mining sector receipts grew 25% y/y to US$5 billion in 2021 supported by firm international prices and a raft of measures taken towards turning the sector into a US$12 billion industry by 2023,” IH said.

“The introduction of the export initiative scheme addressing incremental retention ratios and exemptions from export surrender requirements and rolling back of presumptive tax on small-scale miners saw gold production rise 55% year-on-year to 29,6 tonnes compared to 2020 despite heavy rains slowing operations in Q1 (first quarter) . Volumes for PGMs came in relatively flat on account of construction works still to come to maturity, receipts for the sub-sector were projected US$2,37 billion, driven by strong global prices. Optimism for 2022 in the sector remains encouraged by ongoing developments to increase capacity, and outlook on commodity prices. The sector appears to be attracting improved funding at this point,” added IH.

Turning to regional FDI trends, IH said despite world trade suffering severe headwinds in 2021 due to the Covid-19 pandemic, inflows into the continent surged by a staggering 147% to US$97 billion, compared to US$39 billion in 2020. – (The Independent)

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