adminThe Zimbabwe Chamber of Mines says it is projecting a difficult year for mining companies in 2016 mainly due to depressed commodity prices, power shortages and other challenges.
The chamber said the mining sector, which has recorded negative growth for the second year in a row since the country adopted use of multiple foreign currencies, was expected to grow by 1.6 percent next year, but the growth was far too small to get back to 2014 output levels.
This year the mining sector is expected to record a negative growth of -2.5 percent.
“In 2016, the sector will continue to be weighed down by depressed commodity prices, power shortages, inadequate capital and an unsustainable cost structure compounded by high electricity tariff, high cost of funding and sub-optimal royalty,” the chamber said in a commentary on the 2016 National Budget.
“The sector needs to grow by 3.3 percent in 2016 to get back to 2014 output levels, and needs to grow by 3.7 percent to get back to 2012 peak value level.”
The chamber welcomed the deferment of the 15 percent export tax on unrefined platinum to January 1, 2017.
“This positive move would provide a reprieve to platinum producers as they set up their beneficiation infrastructure in line with proposals submitted to government.
“However, just like gold, the platinum sector requires support in form of royalty reduction to restore viability especially during this period of depressed prices,” it said.
The Chamber of Mines also urged government to expedite reforms including amendments to the Mines and Minerals Act and review of the fiscal policy for the mining sector.
This, it said, would reduce investor uncertainty pertaining the time of completion and the content of the laws.— New Ziana.
Online Reporter