Mining is projected to grow by 11,4 percent this year from 6,5 percent last year largely driven by platinum, gold, coal, nickel and diamonds
Business Reporter
GOVERNMENT has moved to forge a common understanding with mining firms to ensure the mining sector makes optimal contribution to medium term national economic growth prospects.Executives of mining firms yesterday met with Mines and Mining Development Deputy Minister Fred Moyo to discuss the key fundamentals necessary for optimal performance of the mining sector.
The objective was to come up with a strategy for the sector in the context of Government’s medium- term plan, the Zimbabwe Agenda for Socio-Economic Transformation covering the period 2014-18.
In that regard, mining has been declared the centrepiece of the Government’s economic growth strategy in the medium term with value addition and beneficiation critical components of that thrust.
Mining is projected to grow by 11,4 percent this year from 6,5 percent last year largely driven by platinum, gold, coal, nickel and diamonds in light of projected metal prices boom this year.
Among the key issues discussed at yesterday’s meeting are value addition, beneficiation, formalisation of informal gold mining, long-term capitalisation of mines and local cleaning of diamonds.
The meeting also discussed measures to maintain viability of gold mining after the plunge in prices and impact of royalties, charges, fees and proposed levy on raw platinum exports.
“All agreed that it is not a matter of debate (on value addition and beneficiation), it is now a policy issue. It is about agreeing how and when we are going to do it,” Deputy Minister Moyo said.
Discussions centred on the logistical and financial requirements to usher in value addition and beneficiation in strategic minerals such as platinum, diamonds and chrome, the deputy minister said.
As part of the initial steps toward extracting maximum value from diamonds, Government said cleaning of diamonds will now be done locally and a deadline has been set for end of February.
As part of its bold statement to ensure value addition, Government has proposed a 15 percent levy on raw platinum exports and a total ban by end of this year. Industry though has decried the levy saying it will sterilise ground and negatively viability of mining companies.
In that vein, Government this week invited 10 companies to submit proposals, by the 17th of this month, for the establishment of base and precious metal beneficiation and value addition facilities with the deadline for the ban on export of un-beneficiated platinum set to be effected next year.
“We also discussed gold, the price of gold has dropped to levels around US$1 200 an ounce, we wanted measures for short-term viability action plans to protect the sector,” he said.
Zimbabwe is losing billions of dollars in potential revenue due to exportation of unprocessed minerals, especially in platinum and diamonds where potential exists for beneficiation and value addition.
Deliberations also focused on measures to be pursued to formalise small-scale gold mining.
“We needed to agree it is the responsibility of Government and industry to bring normalcy in the sector.”
In that regard, the expectation is that large scale miners would assist the small miners by allocating them claims, supporting them with resources and technical expertise needed in their activities.
On its part, Deputy Minister Moyo said Government would assist the Chamber of Mines of Zimbabwe in development of the skills required to ensure optimal performance of mining.
Yesterday’s meeting also discussed the far reaching implications of power shortages on the growth and contribution of mining to the economy with plans afoot to engage power utility Zesa Holdings and ministries of Finance and Energy on how best to deal with the power crisis.
With mining earmarked as the anchor for medium-term growth, yesterday’s meeting helped to inform Government on mining firms strategy in securing the funding needed to optimise production.
The mining sector requires US$5 billion to US$7 billion over a five year period to raise output and replace equipment following a decade of economic instability characterised by hyperinflation.