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Michael Tome-Business Reporter
THE Chamber of Mines of Zimbabwe (CoMZ) says funding gaps and infrastructure bottlenecks have hindered the mining sector performance.
Mining is a strategically important sector to the Zimbabwean economy, accounting for over three quarters of export receipts and 16 percent of gross domestic product.
The sector has potential to replicate growth registered in 2021, but is sometimes hampered by bottlenecks that include poor railway and road networks as well as the power deficit.
Further, limited to capital for long term capital projects remain a significant stumbling block to initiatives aimed at sustainably growing the sector.
Mining houses however, remain bullish about 2022, anticipating that global economic recovery and elevated commodity prices will continue.
Zimbabwe’s mining sector generated more than US$5 billion in 2021, keeping the country on course towards achieving its target of a US$12 billion mining economy by 2023.
A survey of mining executives last year revealed that a number of players in the industry had plans to ramp up production this year.
It emerged the target was to attain average growth rates of between five percent for platinum group of metals and growth of up to 32 percent for the diamond sector.
According to the study, the sector forecasted average capacity utilisation to reach 83 percent from 80 percent capacity level achieved in 2021.
Pardon Chitsuro, from CoMZ economic affairs department said lack of capital, dilapidated transport networks and unreliable power supply were inhibiting the growth potential of the mining sector.
“The issue of capital shortages is a big one, there is a funding gap for both sustenance of operations and ramp-up.
“…and there is also the issue of erratic and inadequate power supply; the current power system is affecting the mining business in a big way specifically for mining operations that are not connected on dedicated power lines. They are facing frequent power outages,” said Mr Chitsuro
He also lamented the difficult economic environment citing that it is presenting challenges in the form of increases in cost of the mining business.
“The issue of high-cost structure, inflation and exchange rate disparities play a big role in escalating the cost structure,” he added.
Mr Chitsuro said 2021 saw strong recovery in production for some key minerals. Gold output increased by 50 percent, while exports jumped to US$5,2 billion from US$3,2 billion in 2020.
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