Online Reporter
Mining is absolutely critical for the Zimbabwean economy and for the welfare of all Zimbabweans, providing around 80 percent of exports and thus responsible for the reasonable foreign currency position we are now in and the stable prices and local currency.
Although prices of most minerals, gold excepted, have fallen over the past year, the miners have largely overcome this by pushing up volumes, and with both the rise in gold output and prices this has seen overall mining value at least maintained.
Part of this surge in mining is due to the far-sighted policies of the Second Republic, which treats those investing in mining as valued partners in development, making sure they can hold adequate reserves for the lifespan of their mines. The mining companies have largely responded positively, paying their modest royalties, obeying mining safety and training regulations, and seeing the Government pressure for local value addition as a business opportunity, where everyone wins.
It is also generally accepted that major mines will have a close relationship with the communities they operate in. This starts with making sure that when suitable jobs arise the local community gets first look in, to building up capacity in the community and helping out with the capital required for social services such as schools and clinics.
Generally speaking the mines try to be good neighbours.
Mining companies have also taken a broader view of their investments, with some of the largest adding power stations to their portfolio so that they can overcome the tight electricity supplies in Zimbabwe by at least generating a significant amount of their own needs.
The solid mutually-beneficial relationship was exemplified this week when President Mnangagwa accepted an invitation from Zimplats, the largest platinum miner, to commission a 35MW solar power station and an expanded smelting plant.
Since entering Zimbabwe, Zimplats has consistently been increasing its investment, especially in the last few years under the Second Republic.
The two latest investments commissioned this week highlight the thrust of the company. Value addition in platinum means moving from exporting ore to exporting ingots of platinum group metals.
We are not yet at the final stage, but Zimplats has been moving through the intermediate stages first to concentrates and now to the smelting stages.
While this is Government policy, to push up the value of production and value of exports, it is also good business sense.
Processing of minerals is a fixed charge and so when output is measured in terms of processed minerals, the fluctuations of world prices are far less extreme.
Zimplats, as the President noted, has a policy of hiring Zimbabweans wherever possible and, with its skills training, now has almost the entire staff from the lowest grades to the chief executive being Zimbabweans.
Other mining companies often have similar policies, showing the large and growing pool of professional and skilled people in Zimbabwe, but Zimplats was a leader in this process.
Hiring locally automatically cuts costs, even if there are no differentials in pay scales. The local staff do not need “home leave”, do not need to have their children sent to expensive boarding schools “back home”, and do not get homesick since they are at home.
The other major investment was a 35MW power station, one of the largest private power stations in Zimbabwe. Zimplats went for solar, which is now cheaper than coal or petroleum stations as well as environmentally far more desirable. This is the first phase, completed on schedule, of an eventual 185MW station.
Those wishing to invest in solar, at least for a while, can possibly come to deals with Zesa over virtual storage, effectively using Lake Kariba.
Zesa has generation capacity of 1 050MW at Kariba South, but the average output allowed with present water inflows and dam levels is around 40 percent of that.
Even when Zesa juggles its daily water use to give more power in peak periods and cuts back in the slack times, there is still some opportunity left over for a solar station to sell to Zesa during the day, allowing more of the daily water ration to be kept in the lake until nightfall when the hydro station can be turned right up.
Such partnerships need to be explored.
President Mnangagwa was very upbeat about the mining industry and about the results that can be obtained when everyone works together for mutual benefit.
This pro-investment and pro-business set of Government policies has been paying significant results in pushing up gross domestic product, adding new jobs including good new jobs for skilled people, driving exports so that the general provision of foreign currency is much improved, and even the royalty taxes, half of which go to the new reserves backing the new local currency.
The Second Republic is keen on collaboration, and has been pushing up rural incomes significantly through a range of programmes, some largely Government driven, others such as the tobacco surges being Government backed private enterprise.
In many cases the results come through because the Government creates much of the environment that allows companies and individual Zimbabweans to then seize opportunities to make money and better themselves.
