Mining sector suppliers urged to improve quality, price
THE Zimbabwe Chamber of Mines president Mr Thomas Gono has stressed the need for suppliers of various equipment in the mining sector to improve the quality and pricing structure of products in a bid to enhance local content.
Speaking during the 2023 Mining Industry Suppliers Forum, on the side-lines of Mine Entra yesterday, Mr Gono said the Chamber of Mines recognises the importance of suppliers in the mining value chain and continues to take the lead in promoting the use of local factors of production.
He said the suppliers sector remains a critical component of the mining industry value chain, which he said is reflected by the 2022 State of the Mining Industry Survey, which revealed that of the US$5,6 billion revenue generated by the mining industry in 2022, approximately US$2 billion was spent on suppliers.
“I am fully aware that this meeting comes at a time when our suppliers are facing several challenges, chief among them, foreign currency constraints, high-cost structure, and competition from imports.
“This situation has limited the capacity of local suppliers to meet mining companies’ demands. To enhance local content in the mining industry, suppliers should continue to thrive to improve on quality of products as well as the cost and delivery lead times, in order to tap into this huge opportunity,” said Mr Gono.
The forum which was running under the sub theme: “Addressing Challenges Affecting Suppliers of the Mining Industry” emphasised the need to promote value addition and beneficiation of minerals and the local procurement of mining equipment.
The emphasis on value addition is in line with the Mine Entra theme: “Accelerating Economic Transformation through Mineral Beneficiation”.
Image taken from Shutterstock
Mineral beneficiation and value addition are central towards the surpassing of the US$12 billion mining target and attainment of Vision 2030 of Zimbabwe becoming an upper middle-income economy.
Zimbabwe has been recording a growth trajectory in the mining sector following different policy interventions, which has seen gold output growing as well as new players investing in the sector.
Mr Gono said the mining sector currently receives inputs amounting to 17 percent from the local manufacturing sector adding that local procurement will remain industry’s long-term goal.
He said the coming in of the Second Republic has seen the mining industry improving, which has seen the sector grow from US$2,7 billion sector in 2017 to a US$5,4 billion sector in 2022, translating to a 100 percent growth in export revenue.
“The medium to long term prospects of the mining industry remains bright, with output for most minerals expected to increase benefitting from ongoing expansion projects across the entire mining industry,” he said.
However, he said the mining industry is currently grappling with challenges that are weighing down the full potential of the sector.
Key among the challenges is softening of commodity prices, foreign currency shortfalls, high-cost structure and capital constraints.
However, the Chamber continues to engage authorities for a low-cost structure to restore viability of mining projects specifically during the depressed global commodity price phase
The mining industry is one of Zimbabwe’s economic mainstays with the sector presently contributing about 70 percent of the country’s foreign currency earnings.
The 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.
International investors have also grabbed the opportunity in the sector bringing in new technologies and promoting value addition and beneficiation of local minerals.—chronicle
