‘Gold to anchor projected US$12bn revenues’

Oliver Kazunga

Senior Business Reporter

GOLD will likely drive the growth of mining into a US$12 billion sector by year-end as envisaged in a strategic roadmap launched by Government in 2019, which is premised on reopening closed mines, expanding existing ones and promoting new investments.

Mines and Mining Development Minister Winston Chitando told a 2023 second quarter gold mobilisation workshop in Harare last week that the yellow metal — expected to generate more than US$4 billion this year — is still the major foreign currency earner.

“Gold is the major foreign currency earner of that US$12 billion and is projected to bring in US$4 billion, and the gold mobilisation blitz is one of the ministry’s strategic plans to increase gold deliveries to Fidelity Gold Refineries (FGR), contributing to the growth of the mining sector,” said Minister Chitando.

“Notwithstanding the numerous challenges we may face operationally, as Government, we are hopeful that the US$12 billion milestone by the end of this year is achievable.

“Other major minerals to lead the growth in this sector include platinum, diamonds, coal and hydrocarbons, chrome and lithium.”

Platinum is forecast to weigh in with U$3 billion, diamonds US$1 billion, while chrome, ferrochrome and carbon steel will generate US$1 billion.

Coal will also similarly contribute US$1 billion.

Lithium is projected to top US$500 million while other minerals will generate US$1,5 billion.

Collective efforts have led to a significant increase in gold deliveries, he said.

Last year, the country produced 35,3 tonnes of gold, which was 18,3 percent above the previous year’s output.

“Over the last three years, every year, there has been an increase, although I still think that we should be going beyond 40 tonnes of gold this year; 40 tonnes will be good,” he said.

In the first four months of this year, output of the yellow metal was, however, 15,8 percent below the 10 tonnes delivered during the corresponding period in 2022.

Speaking at the same event, Chamber of Mines of Zimbabwe technical affairs manager Mr David Matyanga said the mining sector grew by 10 percent last year, driven by the gold sub-sector, which increased by 18,3 percent.

“This mining sector growth was underpinned by strong performance across all key minerals and supported by firm commodity prices. The sector generated a record US$5,6 billion in mineral exports, this being 80 percent of national exports,” he said.

“In the outlook, the sector is projected to grow by 10,4 percent in 2023. We anticipate the projected growth will be anchored by ongoing expansion projects and investments in the mining sector, as well as enhanced capacity utilisation across the industry.”

Average capacity utilisation in the mining industry this year is projected at 84 percent, compared to 81 percent in 2021.

However, he noted that the sector continues to face a number of challenges in relation to foreign currency shortfalls, a fragile power supply sector, capital shortages and a high-cost structure.

“In terms of the strategies to enhance gold output, we believe the development of a competitive operating environment for the gold industry is key as it guarantees viability of the sector.

“The second strategy is to address energy infrastructure challenges and to sustain operations and growth in the gold sector and other sectors within the mining industry,” he said.

Large-scale miners also believe that retaining only 75 percent of their foreign currency earnings is making it difficult for them to fund imports of mining consumables, as well as sustaining surface and underground operations, among others.

Meanwhile, President Mnangagwa has since exhorted miners to be responsible corporate citizens that promote sustainable development as the country moves towards Vision 2030.

Officiating at the launch of the Responsible Mining Initiative at State House in Harare last week, the President said malpractices that include land degradation and haphazard operations conducted outside the confines of the law would never be tolerated.

Due to illegal mining activities by artisanal and small-scale mining operators, early this year, the Government permanently shut down Globe and Phoenix Primary School in Kwekwe, Midlands province, after 18 learners were injured when a classroom floor collapsed into an underground mining shaft.

“The situation where the sector is characterised by malpractices such as environmental degradation, mineral leakages and haphazard operations conducted outside the legal provisions of our country’s laws can never be condoned,” he said.

“The centrality of the mining sector in the broader national development, modernisation and industrialisation of our country entails that all stakeholders demonstrate a greater sense of responsibility in the mining activities.

“Cabinet has approved the Responsible Mining Initiative to increase oversight over all mining operations as a result of the malpractice evident in this sector,” he said.

Last month, Cabinet approved the audit, which will be conducted between May and June, and will cover both small- and large-scale mines.

The initiative, President Mnangagwa added, is an indispensable undertaking by the Government in its quest to exercise good stewardship over the country’s vast natural and mineral resources.

Overall, the audit will also establish a framework that promotes responsible mining practices while guaranteeing the well-being of the communities and environments where the activities are taking place.

“Zimbabwe is open for business and is not open for abuse. The exercise will be conducted by various Government ministries, departments and agencies. Audit teams will conduct thorough investigations on activities within the various mining entities with the objectives of highlighting challenges and proffering recommendations towards the overall improvement of our mining sector,” he said.

Aspects of addressing unique priority needs of local communities remain important and employees, who are the anchor of productivity within mining activities, should be awarded fair wages, he said.

“As good corporate citizens, mining companies, just like other entities across the economy, should complement the Second Republic’s quest to realise development, modernisation and industrialisation that leaves no one and no place behind,” added President Mnangagwa.