Online Reporter
The Herald, 1 April 1986
THE total value of mineral output last year is expected to reach about $620 million because of the depreciation of the dollar despite lower output.
According to the latest RAL Merchant Bank’s executive guide to the economy, the total value of output reached $574 856 000 in the first 11 months of last year, or 16,4 percent more than in the same period the year before.
Apart from silver, which fell by 10 percent in volume and value terms, the local currency values of Zimbabwe’s principal minerals all increased in the first 11 months of 1985.
Cobalt, although a relatively unimportant mineral in terms of its contribution to the value of mining output, registered the largest percent growth in volume and value.
During the period, the value of cobalt increased by 237,5 percent to $2,68 million while nickel increased by 30 percent to $68,4 million, copper increased by 28,2 percent to $38,9 million, iron ore by 26,6 percent to $17,71 million and chrome ore by 14,7 percent to $30,92 million.
However, the volume of mineral output fell slightly during the period because of lack of substantial new investment in the mining industry. The main falls were recorded for copper, which was down by 11,1 percent, silver by 10 percent, coal by 1,4 percent and tin by 0,4 percent
The guide said that gold Zimbabwe’s remained most important mineral. Production had been underpinned by the Government’s price stabilisation scheme and assistance in the form of expertise, assaying, loans and equipment given or hired to small scale gold mines.
In addition, a few individual and institutional investors had been attracted into gold prospecting but the volume of gold production was not expected to be more than the 478 000 fine ounces achieved in 1984.
Lessons for today
- The passage says mineral output value rose because of the depreciation of the dollar, even though actual production fell. According to research Sometimes national export earnings rise not because more is produced, but because the currency has weakened making exports appear more valuable in local currency.
- Even though mineral earnings increased copper production fell, silver production fell, coal and tin output fell slightly. High revenue does not always mean strong industry performance. Real growth depends on production, investment, and efficiency, not just prices or currency movements.
- The passage clearly states that output fell due to lack of substantial new investment in the mining industry. Without continuous investment in machinery, exploration, technology, and skills, mining output declines over time. This applies to all resource based industries.
- The guide notes that gold was still the most important mineral, supported by price stabilisation, expertise, loans, equipment support Strategic government support can sustain key industries, especially when global markets are unstable. Gold’s stability proved essential to national earnings.
- The government assisted small-scale miners with equipment, loans, as saying services, technical expertise. Supporting small-scale miners increases national production and creates inclusive economic growth. This is still true today across Africa.
- The passage notes that some investors were entering gold prospecting, though overall production wasn’t expected to exceed 1984 levels. Investment interest alone is not enough. Investors need favourable conditions, capital, technology, and stable policies to turn interest into real output.
- From this passage, we learn that:
- Currency depreciation can inflate export earnings.
