adminthe Chamber of Mines president, Mr Winston Chitando, has said.
Addressing delegates at the chamber’s annual conference in Victoria Falls on Friday, he said some policies by Government were running parallel to the contribution of the mining industry.
“The chamber of Mines of Zimbabwe believes that the lack of consensus on the contribution of the mining industry to the economy is the prime reason for some policy interventions working to the detriment of the industry,” he said.
He said policy measures meant to power the mining industry for growth and development should be instituted.
He said it was only from the growth of the sector that increases in the contribution of the mining industry to the economy could be achieved.
“In this regard, the mining industry will continue to make contributions towards policy formulation and towards the reviewing of the existing investment climate with the aim of attracting investment needed for the growth of the mining sector,” said Mr Chitando.
He called for a review of mining economics to ensure projects in the sector were globally competitive, adding that the present royalty framework was on the high side.
“The recently reviewed royalties for gold, platinum and diamonds are now much higher than those of regional competitor countries and certainly much higher than global averages. There is scope for review of these royalties,” he said.
Mr Chitando said numerous fees and charges placed additional burdens on cost structures.
“A lot still needs to be done in ensuring that policy development is truly inclusive at the formulation stage and that it is driven by facts from data trend. The Chamber of Mines will continue to engage the Government in this regard,” he said, adding that the future of the mining industry was bright.
He said Zimbabwe’s mining sector played a key role in the socio-economic development of the country.
“The sector’s contribution to the economy comes in several forms, inclusive of direct contribution to Gross Domestic
Product (GDP), employment creation, foreign exchange generation, gross national investment, social infrastructure development and direct revenues to the Government,” said Mr Chitando.
He said the sector had direct and indirect downstream multiplier effects to other economic activities.
“Facts on the ground reveal that the mining sector currently contributes 13 percent to the nominal GDP, 50 percent to the nation’s total exports, 12 percent to fiscal revenue, 45 000 workers to national employment, more than 50 percent of foreign direct investment, and corporate social investment in agriculture, health, education, housing and infrastructure.”
He said of the approximately $2,1 billion revenue generated by the mining sector last year, 36 percent was consumed by purchase of materials, 15 percent by salaries and wages and 21 percent by other operating expenditures.
“From 1999 to 2008, the mining sector’s contribution to total GDP has been averaging about 4 percent. The contribution increased phenomenally to average 11 percent between 2009 and 2011.
“In 2011 alone, mining output is estimated to account for 13 percent of GDP directly, with the indirect multiplier effects taking the contribution to about 18,4 percent of GDP in total.”
Mr Chitando said the challenges that faced the mining industry during the year were largely the same as those that have faced the sector in the past five years.
The challenges included difficulties in accessing working capital, electricity supply constraints, policy initiatives to attract investment and limited investment in mineral exploration.
Government has projected that the mining industry will grow by 15,8 percent this year, thus maintaining its position as the country’s fastest growing sector and boosting the projected 9,4 percent economic growth.
Last year, the mining industry contributed an estimated 13 percent to GDP.
Online Reporter