The Herald (Harare)

Zimbabwe: Mining Sector Has Potential to Turn Around Economy

editorial

Zimbabwe is rich in natural resources and produces more than 40 types of metals and minerals.

Mineral exports account for close to 40 percent of the country's export receipts, accounting for massive employment and 12 percent of the gross domestic product.

Gold belts run along sources of nickel, asbestos, iron ore and pyrites production and contain reserves of antimony, tungsten, corundum and limestone.

Zimbabwe is the world's third largest source of platinum group metals and significant reserves of nickel are found along the Great Dyke.

Coal is one of Zimbabwe's primary energy sources.

High quality coal deposits abound in Hwange, parts of Matabeleland North, the Zambezi Valley and in the south east.

The Makonde basin in the north west of Zimbabwe, contains the country's copper and graphite mines as well as reserves of lead, zinc and silver.

Diamonds have also entered the scene amid high expectations for the economy's turnaround on the back of strengthening global demand for the precious gems.

Although foreign owned companies which have of late heeded the Government's calls to localise their ownership structures were the dominant players, there are also a significant number of small scale miners.

There is no doubt whatsoever that the future of the mining industry is assured given the extensive reserves of chrysolite, asbestos, chromite, iron ore, lithium ore and coal that abounds.

The immense potential that this country holds in terms of mineral wealth is undoubtable as it spans across the provinces. The mining sector has the potential to turn around Zimbabwe's economic fortunes.

What has come to pass is the fact that unless fully exploited, it still remains potential and there is no immediate benefit from what lies underneath without full realisation.

Gone are the days that locals could not gainfully engage in the extractive business without foreign capital through a manipulative system that resulted in the exploitation of the country's mineral resources for processing in foreign lands. This is not how it should be.

Through a process of constructive engagement and explicit investment policies that have been spelt out through the Indigenisation Regulations, locals are free to engage foreign partners for as long as they follow the law.

What is of concern however, is the speculative practice of holding onto mining concessions and claims with the objective of profiteering at a time the country fully requires all hands on deck.

It is therefore encouraging that the country has adopted the "use it or loose it" policy which essentially deals with the speculators. What this means is that for as long as you do not use your claims, the Government has the power to take it away from you and give it to other serious investors in the extractive industries.

Equally the Government has the option of increasing taxation levels if the corporates indulge in speculative behaviour.

Such measures are strong possibilities over the next several years of low growth and structural budget deficits.

But whether a more draconian across-the-board increase in corporate taxation occurs will depend heavily on the behavior of the corporate sector itself.

With the country on course for readmission to the London Bullion Market once it reaches gold production figures of 15 000 tonnes, (currently at 14 000 tonnes), there are all the reasons to call for the ramping of production figures.

This can only be achieved if all the serious mining firms pool their efforts towards sustainable production.

Of late, Freda Rebecca, Blanket Mine, New Dawn and other players have reported encouraging numbers on course to bring back the glory days.

The platinum miners have also had their day with Zimplats, Mimosa and Unki announcing their grand expansion plans to boost production. The fact that these mining giants are now locally owned gives even more reason to ramp up production with the ultimate objective of eventually setting up a refinery in Zimbabwe once the optimum figures are achieved.

The same goes for gold. Our target should now be focussed on beneficiation as we continuously strive to add value to our products.

Gone are the days when we used to look to outsiders for our salvation and considering that we have been managing to register significant economic growth figures even in the wake of illegal sanctions, we can do more. Sharing a common purpose should be our objective and the mining sector in particular has shown that this is possible once we join hands as Team Zimbabwe.

It surely does not make economic sense that we mourn for Foreign Direct Investment from such countries as Britain when we are rich in mineral resources.

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