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Oliver Kazunga Business Reporter
THE Chamber of Mines has dismissed as a “myth” claims by local suppliers that mining houses are unwilling to procure products from the domestic market.Suppliers have accused mining companies of refusing to support the growth of the domestic market saying most of these companies continue to import products that are on the local market.
Speaking during a Joint Suppliers and Producers conference at the just-ended Mining, Engineering and Transport (Mine Entra) exhibition in Bulawayo, the Chamber of Mines first vice president Mr Allan Mashingaidze said hyperinflation prior to 2009 and the 1992 drought were the two major issues presently affecting local procurement linkages.
“When we talk about the procurement linkages in the mining industry, the myth is that the mining sector does not want to buy from local suppliers. Why would we want to prefer buying from people that insist on payment first?
“There are two major issues that affect the procurement linkages.
“The drought in 1992 practically de-industrialised Bulawayo because there was no water for use by industries.
“The hyperinflation prior to 2009 meant that we had to import virtually everything for our mines to continue running,” he said.
He said mining firms were willing to buy their consumables locally but the domestic industrial capacity was on its knees.
Mr Mashingaidze said there was also no point for mines to procure locally because a number of suppliers were also importing due to low capacity utilisation by local industries.
“Mining is a business that runs 24 hours a day throughout the week and if you cannot get a key product that will keep operations going, you have to get it from the foreign market. Until we get to a stage of consistence in local supply, we need to avoid these accusations that the local mining industry does not want to buy from the local market. If we (mining firms) have no interest in buying locally, would we be here (at Mine Entra)?”
He said the Chamber of Mines was interested in seeing Zimbabwe’s unemployment levels going down and this is only possible if fundamentals affecting local industries’ capacity to produce were addressed.
He said the chamber pinned hopes on the five-year Industrial Development Policy (IDP) that it meant to address the country’s industrial capacity.
The IDP was launched by Government this year.
Speaking at the same occasion Amtec group chief executive Mr Lucas Taruvinga who was representing the suppliers said among other challenges, mining companies were not paying them within the stipulated time.
In turn, he said this impacted negatively on the suppliers’ ability to supply constantly.
“The issue of payment by mining companies is one of the major challenges negatively impacting on the suppliers’ ability to constantly supply. We understand that when the companies pay foreign suppliers, they pay instantly but if it’s a local transaction in some instance, it takes 150 days and that affects our ability to supply. We are appealing to mining companies to pay us early,” said Mr Taruvinga.
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