Mining investors pull back… as government procrastinates

THE mining industry has called on President Emmerson Mnangagwa’s government to transform promises for major policy reforms into a binding legal commitment in order to reactivate investor interest into the sector, NewsDay Business has learnt during the ongoing Mine Entra conference.

A four-page document, which was dispatched to Finance and Economic Development minister Mthuli Ncube by the Chamber of Mines of Zimbabwe (CoMZ) last week noted that investment into Zimbabwe’s mining sector had been held back due to delays in legal provisions to back promises to exempt the industry from the controversial indigenisation and economic empowerment laws.

The promise has been in place since 2018 when a new government swept to power through a coup that snuffed out the late Robert Mugabe’s near four decades rule highlighted by chaotic economic policies.

The CoMZ paper, which shared the industry’s expectations for the mid-term fiscal policy review due on July 28, said Ncube must give full legal undertakings.

“(On) the current government policy for exemption of the mining sector from complying with the equity thresholds of the Indegenisation Act, despite the new government policy provision, regularisation of the policy into law remains outstanding, affecting foreign investor decision making processes into Zimbabwe,” the CoMZ said in the paper.

“In line with undertakings from the Minister of Finance, we are appealing to the Minister of Finance to finalise the matter in the 2022 midterm budget review statement to promote foreign direct investment (FDI) into the country’s mining sector,” the paper added.

Under its hyped ‘Zimbabwe is Open for Business’ campaign, Mnangagwa’s government promised in 2018 to extensively review policies including the Empowerment Act, in order to stimulate investor appetite.

Bad laws have been for keeping investors on the fence.

However, four years since making the undertakings, FDI remains a trickle, with about US$500 million flowing into the country yearly. This is a far cry to FDI inflows of up to US$2 billion being attracted by Zimbabwe’s regional peers annually.

The country has an ambitious plan to scale up mining industry output to US$12 billion annually from next year, compared to US$5 billion achieved in 2021.

But analysts say until government address es key hurdles confronting mines including power, the target may be difficult to achieve.

Contents of CoMZ’s paper came as the mining industry kicked off a key exhibition, Mine Entra in Bulawayo yesterday where major companies will be showcasing their products and services until Friday.

Coal processor Zambezi Gas, mining implements dealer Zimplow Holdings Limited, Zesa Enterprises and Xinhai are among key firms exhibiting at Mine Entra, where the Zimbabwe Revenue Authority is also exhibiting.

In an interview with NewsDay Business, CIH Industries commercial manager Costain Dodo said Mine Entra was important in Zimbabwe’s strategy to produce its own industrial products for local firms.

“We are trying to produce local products,” Dodo said.

“We are taking advantage of the Buy Zimbabwe campaign to produce for the local industry,” he added.

Mnangagwa is today expected to officially open the mining conference running concurrently with Mine Entra.-newsday