Mineral revenue slumps 29%

ZIMBABWE’S mineral revenue declined by 29% to US$2,6 billion in the first half of this year due to a number of challenges including softening commodity prices, foreign currency shortfalls, high-cost structure and capital constraints.

This was revealed by Chamber of Mines of Zimbabwe (CoMZ) president Thomas Gono at the Mining Industry Suppliers Forum held in Bulawayo on Wednesday.

“The performance of the mining sector during the first half of 2023 was mixed, with platinum group metals (PGMs), up 5%, diamond (43%), lithium (100%) and coal (81%) recording output increases, while gold (-12%) and ferrochrome (-17%) recorded output declines compared to the same period last year,” he said.

“Meanwhile, mineral revenue declined from US$2,9 billion in the first half of 2022, to US$2,6 billion in the same period this year.”

He said the medium to long-term prospects of the mining industry remained bright, with output for most minerals expected to increase benefiting from ongoing expansion projects across the entire mining industry.

“The chamber continues to engage authorities for a low-cost structure to restore viability of mining projects specifically during difficult times of depressed commodity prices,’’ said Gono.

He said the supplier sector remained a critical component of the mining industry value chain.

Gono said the chamber’s 2022 State of the Mining Industry Survey revealed that of the US$5,6 billion revenue generated by the mining industry in 2022, approximately US$2 billion was spent on suppliers.

The sector, he said, received inputs amounting to 17% from the local manufacturing sector, 12% from electric power, 3,2% from iron and steel products, 3% from distribution, 2,3% from non-electrical machinery and equipment, 1,3% plastics, rubber, 1% from fibres, matches, ink and other chemicals and 17% from mining itself.

“This forum seeks to deliberate and agree on solutions to address issues affecting suppliers of the mining industry. Our mining industry continues to play an important role in the economy.

Currently, the mining industry accounts for more than 80% of total national exports, contributes 13,5% to gross domestic product. Approximately 20% of mining sector earnings are paid to the government as taxes and levies, 73% of foreign direct investment goes into mining.

The formal mining sector employs more than 55 000 people with an estimated 500 000 involved in small-scale and artisanal mining.

In addition, Gono said for every dollar generated in the mining sector, an additional US$3 is generated through linkages with downstream sectors.

Mimosa Mining Company representative Wilbert Manyika said funding had been the missing link in the retooling and capacitation of the mining sector.

Manyika challenged the government to speed up the issuance of permits and licences for the miners.

“There must be enough conversation around the statutory instrument before its implementation,” he said.-newsday