Mining industry needs $3bn investment to increase capacity

Gibson Mhaka Business Correspondent
THE mining sector needs more than $3 billion investment to increase capacity to an average of over 80 percent within the next three to five years, Permanent Secretary for Economic Planning and Investment Promotion Dr Desire Sibanda said yesterday. Presenting a paper titled “Attracting Foreign Direct Investment to Zimbabwe: Mining Sector Perspective” to delegates attending the Mine Entra conference, he  said although the policy environment was important for attracting investment into mining, prospective and known geological resources were crucial.

“Mining has been the fastest growing sector in the economy since 2009 where it has registered an average annualised  growth of more than 30 percent. A survey carried out by the Chamber of Mines of Zimbabwe estimates that the mining  sector requires between $3 to $5 billion investment to increase capacity to an average of over 80 percent within the next three to five years.

“Investment is also needed to upgrade infrastructure development such as  power, transport and water which are the biggest constraints impacting the mining sector. Indeed countries attracting more Foreign Direct Investment (FDI) have resisted adopting protectionist policies”, he said.

Dr Sibanda said the country has been unable to fully exploit the benefits of high international prices to boost exports   further as a result of low investment into the sector.

He said the country was endowed with a wide range of minerals of which 10 out of 50 were being fully exploited. He said exploration would help to comprehensively determine the extent of the country’s mineral wealth and have adequate information to lure investors.

“Zimbabwe is endowed with a wide range of minerals of which 10 out of 50, are being fully exploited, namely gold, platinum, nickel, diamond, chrome and coal. The Government has recently floated a US$32 million tender for an aeromagnetic mineral exploration exercise in the Eastern Highlands. Plans are also in place to set up an exploration company to identify mineral deposits throughout the country”, he said.

Dr Sibanda said perceptions of corruption, political risks and high capital costs associated with establishing or expanding a mining venture were undermining  efforts to fully exploit the country’s mineral wealth.