Mining sector reaps US$20bn exports…British investors warm up to Zim opportunities

THE country’s mining sector has recorded a cumulative total of US$20,2 billion in export earnings in the past five years spurred by the improved investment climate ushered in by the Second Republic whose pro-business policies have lured back foreign direct investors, including British companies.

Driven by President Mnangagwa’s economic diplomacy-focused re-engagement and engagement foreign policy, Zimbabwe has made huge strides in normalising bilateral, regional, and international relations, which has resulted in increased trade gains and new investment pitches. Unlike in the past when mining earnings averaged an estimated US$2,7 billion per year, the sector has recently registered gains in line with the ambitious US$12 billion milestone.

One such giant investment is the establishment of the Muchesu Coal Mine in Binga, Matabeleland North province by a British-owned firm, Contango Holdings, which was officially commissioned by President Mnangagwa yesterday.

Contango has a 70 percent interest in the Muchesu Coal Mine with the remaining 30 percent being held by supportive local partners. The Lubu coalfield is estimated to hold 2,6 billion tonnes of coal, which makes it one of the largest coal ventures in the country.

Despite frosty relations in the past, which resulted in Zimbabwe being slapped with illegal sanctions, more European mining firms are now eying a stake in the fast-growing mining sector.

Zimbabwe is endowed with vast mineral resources including coal, gold, lithium, platinum, chrome, iron ore, and so forth.

In his keynote address, President Mnangagwa said the new coal mine, whose investment is estimated at US$20 million so far, bears testimony to the fact that Zimbabwe is indeed open for business.

“This commissioning ceremony we are gathered to witness today is a milestone achievement towards our quest to attain a US$12 billion mining sector economy by 2023,” said President Mnangagwa.

“The target of a US$12 billion mining industry was set for achievement through a combination of low hanging fruits or quick win projects with a medium-term impact, as well as projects with a longer-term impact.

President Mnangagwa has arrived at Mchesu coal Mine in Binga. He is being welcomed by Vice president Chiwenga, Minister of mines Winston Chitando, local government and public works Minister July Moyo, Matabeleland North Minister of State for Provincial Affairs and Development Richard Moyo, Muchesu Coal Mine General manager Mr Jacques CorMack

“I believe the attainment of Vision 2030 is achievable if mineral value addition and beneficiation are prioritised.”

The President said when the country embarked on the historic Land Reform Programme, it angered the British who retaliated by imposing illegal economic sanctions on Zimbabwe.

Now the wheel has turned around and the British are investing in the country’s key natural resources, which are in abundance, said the President.

“When we took land from the British, that angered them. Now they are coming to invest in Zimbabwe.

“We are going to get money from the British, Americans, and Germans, they will pay for our resources,” he said amid applause.

President Mnangagwa said since the coming of the Second Republic, US$2,07 billion in cumulative exports have been realised from the coal sector alone.

“Therefore, it is pleasing to note that we are gathered here for a milestone towards sustainable development of the coal subsector,” he noted.

He further noted that the coal industry remains critical to Zimbabwe’s power sector and is a significant contributor to the country’s power requirements as it feeds into the country’s thermal stations.

Due to climate change pressures, President Mnangagwa said the instability in Europe has shown that investments in thermal power are still necessary and even more sensible given the country’s vast coal resources.

“If we are to attain energy sufficiency, thermal power will still play a pivotal role in the country’s energy mix,” he said.

The President noted how, under the first phase of the project, Contango has invested over US$20 million into the project and intends to produce coke by installing coke batteries that process coking coal into coke for the industrial and ferroalloy industries in the near future.

To that end, President Mnangagwa said the local coke production industry has seen rapid growth in the Second Republic with coke exports by value increasing by 327 percent from US$39 million in 2020 to US$166,4 million in 2022, as coke-producing companies expand their operations.

“This indeed shows that Zimbabwe is open for business. Our strategies and policy interventions, which have led to this success have resulted in a US$12 billion mining economy,” he said.

“This is evidenced by a total of US$20,2 billion in cumulative exports that have been realised from the mining sector since 2018.”

Muchesu Coal Mine is expected to support various local industries with feedstock from the by-products recovered during coke production once the project is fully operational.

“This project is, therefore, central to the socio-economic development of the country. This signifies that the New Dispensation is committed to developing every part of the country leaving no one and no place behind,” said President Mnangagwa.

Due to the expansive scope of the project, he said the project was a game changer not only for the community of Binga but for Zimbabwe as a whole.

The President reiterated Government’s commitment to continue prioritizing enhanced investments in exploration, the opening of new mines, beneficiation and value addition of minerals, as well as expansion of existing mining projects subject to various commercial and economic models.

In order to move the economy up value chains, he said the Government will continue to improve the ease of doing business through the continued creation of a stable and conducive macro-economic environment.

Muchesu Coal Mine general manager Mr Jacques CorMack paid tribute to President Mnangagwa’s support in the project. He said the mine was a beacon of hope for the district and the entire country, adding that the mine will further contribute towards the development of the country’s economy and position it as a key global player in the coal sector.

Muchesu Coal Mine is one of the signature investment projects under the Second Republic, which is expected to yield high-value benefits for locals and the economy at large.

Matabeleland North has vast mining activities that have been critical to the growth of the province and the country’s development. The province is the hub of coal-to-energy value chain investments, which will unlock up to US$1 billion under the coal and hydro-carbon focus.

Muchesu Coal Mine has already built 20 new homes for relocated villagers while more projects are earmarked to benefit the community.

Vice President Dr Constantino Chiwenga, Minister of Mines and Mining Development, Winston Chitando, Local Government and Public Works Minister, July Moyo, Minister of State Provincial Affairs and Devolution in Matabeleland North, Richard Moyo, senior Government officials, mining executives, and Binga local board officials also attended the commissioning event.-herald