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Ishemunyoro Chingwere Business Reporter
2020 will go down as one of the worst financial years the world has had to endure in recent memory.
Although official updated statistics are yet to be collated, the World Bank in an earlier forecast had noted that the global economy was poised to record a 5, 2 percent shrink due to the shock of the Covid-19 pandemic.
The plunge is the deepest recession the world has endured since the Second World War and it was even worse in advanced economies whose loss the World Bank says is around 7 percent as domestic demand and supply, trade and finance all took a knock.
However, Zimbabwe, particularly the mining sector registered gains amid this global recession.
The gains come at a time when Government is running with what initially looked like an audacious milestone: the 2023 mining sector milestone, with which Government is targeting to grow mining sector exports from US$2, 7 billion in 2017 to US$12 billion by 2023.
In a year in which a recession would have been justified, Zimbabwe saw the opening of several mining assets, expansion of several already existing mining projects as well as the continued flow of foreign direct investments on the back of President Mnangagwa’s “Zimbabwe is open for business” mantra.
Mines and Mining Development Minister Winston Chitando has, in the year gone by, changed his tone from saying “Zimbabwe is confident of achieving the 2023 milestone” to “Zimbabwe is in the process of achieving the 2023 milestone as set out by President Mnangagwa.”
Although financial statistics for the year are not yet ready, indications are that 2020 was indeed a good mining year.
Speaking at the launch of the Chamber of Mines of Zimbabwe 2020 mining sector survey, in October, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said mining together with diaspora remittances had over compensated for struggles in other sectors of the economy due to Covid-19.
For the period January to September 2020, mining exports stood at US$2, 4 billion compared to US$2, 1 billion in 2019 in the same period.
This success, is despite the fact that chrome and chromium products — a key mineral for Zimbabwe, took a heavy knock on the international market as its price plunged due to depressed demand particularly from China. “You are doing a fantastic job in mining, you give us hope,” Dr Mangudya told mining executives at the launch of the mining sector survey.
“Mining grew by 14 percent compared to last year . . . that’s a significant increase, despite Covid which affected the prices of Chrome.
“If you take 30 percent of US$2,4 billion, it’s US$800 that mining is contributing to the auction system,” he said.
The success of the sector is, however, not limited to the 14 percent growth in export earnings, for there are other green shoots that did not show on the export receipts.
These include, but certainly are not limited to the power projects in Hwange which were commissioned by President Mnangagwa in July.
The eight Hwange are a result of private sector capital as well as some which are based on joint ventures between the public and private sector.
Prior to the coming on stream of these projects, Zimbabwe had largely relied on power imports from South Africa’s Eskom and Mozambique’s Hidroelectrica de Cahora Bassa (HCB) to cover its deficit due to depressed generation locally.
But with these projects, which would culminate in up to 3 000MW into the national grid, Zimbabwe will not only stop imports but will be able to power an envisaged industrialisation drive as well as manage exports into the region. The projects have already increased economic participation for Hwange and Matabeleland Province and will go a long way in boosting the province’s Gross Domestic Product (GDP) in line with Government’s devolution strategy.
The power projects, Government has noted, have the potential to earn at least US$3 billion in annual energy exports from the current position of energy insufficiency.
Under these projects, Zambezi Gas and Coal Mine is envisaged to produce 750 Megawatts (MW) once it completes its expansion, Western Areas (600MW), Jinan (600MW), Tsingshan (100MW) and Zimbabwe Zhongxin Electrical Energy (430MW).
Most of these projects are expected to start running from 2023. Plans are also at an advanced stage for the establishment of a 2 100MW power station in Binga, but modalities of this project are still being worked on.
“In addition to that (power projects in Hwange), there will be an agreement that will be signed for a CBM power plant which will, when operational, generate 450 MW of electricity,” Minister Chitando told this publication earlier in the year.
In the gold subsector, Dallaglio Investments (Pvt) Limited, began a gold mining expansion drive at two of its gold mining assets — Pickstone Peerless Mine and Eureka Gold Mine. Pickstone Peerless, is currently producing about 65kg of gold per month and in terms of their expansion plans is expected to grow to about 100kgs per month. At Eureka, which is currently under reconstruction, Dallaglio expects to haul two tonnes per annum of the yellow metal.
“Our vision is to be Zimbabwe’s leading gold mining company at the end of 2022 and we are supported by a very strong team, very strong people in the communities which we operate and with Government giving us these open doors we are looking forward to achieve,” Dallaglio Investments chief executive officer Mr Marc Nicolle told this publication in August.
Arguably the best was saved for the last and it duly arrived in the last month of the year.
December saw President Mnangagwa announcing the birth of a new mining behemoth, Kuvimba Mining House. Kuvimba Mining House is a venture in which Government holds 65 percent shareholding, while a consortium of international and local investors controls the remainder. Its impressive assets include, Freda Rebecca, Shamva, and Jena Gold Mine, the Darwendale platinum project (Great Dyke Investments in which it has a 47 percent shareholding), Trojan Nickel Mine (Bindura Nickel Corporation), Zim Alloys Limited and several dormant mines. The mining house is working on an extensive program which will see it reopening several closed mines as well as expanding those already in production.
Under the US$12 billion milestone, Kuvimba is targeting to generate US$1, 4 billion in annual exports from the current position where it is generating US$24 million monthly.
Its US$1, 4 billion target amounts to 13 percent of the US$12 billion target.
Speaking on the launch of the mining giant, President Mnangagwa said Kuvimba’s arrival shows that the journey towards Zimbabwe’s economic revival is not just sloganeering, but reality.
“Some (sceptics) have been thinking it was a slogan; in fact, social media still says so . . . Let those who believe in slogans continue sloganeering and those who believe in action and practicality and reality do so,” summed the President.
Online Reporter