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The revival and expansion of Zimbabwe’s mining industry is gathering pace, putting back what we had and adding a lot more, largely by putting out the welcome mat for serious investors, instead of assuming we are doing them a favour by letting them even breathe our air.
From the very beginning of the Second Republic four years ago, Zimbabwe has been transforming from a country that was suspicious of direct investment and put obstacles in the way, but has been removing these obstacles, as well as getting rid of the rent-seeking corrupt.
Although much of the mining investment is external, although through a sovereign wealth fund the State is also getting involved in some of the investment, especially the resuscitation of gold mines, we win in many ways.
For a start, as exports start growing, our balance of payments become very healthy. When a country can export more than it imports, and Zimbabwe has now reached that point, a lot of problems fade away.
Admittedly we need to continue our progress in amalgamating our pools of foreign currency to overcome black market operations, but the basics are in place.
Secondly we get a lot of jobs, and not just low wage jobs, but proper skilled jobs. Our foreign investors are keen on maximising their percentage of Zimbabwean staff since this is so much easier, and a lot of costs associated with expatriate staff are simply not there when your workforce lives in the country and sends their children to school in the country.
Thirdly we get more tax revenue. This starts with the PAYE that these Zimbabwean workers with decent jobs pay; then there are the royalties, small royalties in percentage terms but they add up and keep growing as new mines open.
And we get the VAT, not from the mines of course, but that growing workforce do spend their monthly salaries and we take our share from what they spend.
The fact that mining companies have never paid much tax is not that important, hence the reason why most countries put in the minimum royalties instead, and so extra and special tax concessions are not a heavy price to pay for investment.
An extra Zimbabwean policy is to encourage investors to process their minerals in Zimbabwe.
This increases the value of the exports, adds a lot more skilled jobs, provides raw materials for our own industrialisation as we restore our heavy industry, and generally gives us full value for our mineral wealth, which we must remember only turns into money when someone invests a lot in mining it and processing it. Buried in the ground it does no good at all.
But once processed, and processed by well paid Zimbabweans, a lot of other business becomes possible. Big mines create new towns and the downstream businesses in the end dwarf the original mine.
Even on jobs we tend to see a multiplier of at least three downstream jobs for every mining job, so mines drive our own businesses and push our growth far more than just the original investment.
The latest sets of statistics from the Ministry of Mines and Mining Development are concentrating on the processing.
The Alaska copper smelters are now back in operation, having given up the ghost in 2000. They are busy processing stockpiled ore, but Alaska Mine itself is already halfway to re-opening and three other mines are in operation or will start supplying ores soon.
A lithium concentrate plant is 45 percent complete, the new concentrator at the expanding Mimosa platinum mine is 59 percent complete, and similar expansion at other platinum mines will produce enough concentrate to make the next stage, local refining, a viable and profitable enterprise. And once anything becomes profitable investment appears.
Chrome and nickel are now back to being smelted locally out of the ores, and even our black granite is being turned into tiles and counter tops in Mutoko rather than being shipped out as blocks to create jobs in other countries.
The biggest single investment, and this must be biggest mining investment in Zimbabwean history, is now well on the way to its formal and probably very glamorous opening ceremony, the Disco steelworks near Mvuma.
The steel plant is now 50 percent complete with most of the blast furnace parts on site. The associated coke ovens in Hwange are also half way finished, and the giant electricity connection and even the needed power station are on course.
None of this investment is instant. Tens and hundreds of millions of US dollars have to be pumped in before the investor gets a dollar back, and it takes several years to move from bare veld to mines, processing plants, steel mills and tens of thousands of families working out how they are going to spend their decent pay checks.
This is why it has been so important for President Mnangagwa and his Government to continue stressing that the present investment friendly environment is permanent, not transitory, that investments are safe and secure and that the only changes possible in our investment law and policy is to make them even more friendly.
These investors coming in, and especially those in mining, have to work on the long term and that means they need to accept that Zimbabwe is politically stable and equally committed to the long-term advantages of investment, that no one is going to suddenly appear out of the woodwork and demand a “fee”, and that so long as they follow some straightforward regulations, mainly on the environment, labour and transparent finances, they continue to be most welcome.
And this is why the Second Republic’s investment thrust and stability has to be maintained and why all Zimbabweans, and even all political parties, need to be behind it.
Online Reporter