Mining dominates export earnings

HARARE - Zimbabwe earned $366,3 million from mineral exports in the first two months of the year on the back of favourable global mineral prices and stable economic conditions, Finance minister Tendai Biti has said.

Presenting his February state of the economy report Biti said the earnings represented an increase of 17 percent over the same period last year.

Platinum, which Zimbabwe has the second largest reserves in the world after South Africa, accounted for the bulk of the earnings at $143,7 million.

This was followed by diamonds at over $117 million, while gold production surged strongly in the period with export earnings raking in $86,3 million trailed by smaller earnings from nickel, coal and granite.

In terms of the total export earnings that amounted to $524 million, the mining industry contributed 69,9 percent followed by tobacco exports which have accounted for 13,2 percent, while key industries such as horticulture, manufacturing, tourism among others have accounted for an average of six percent.

“Mineral output increased for the month of January 2013, with platinum increasing to 1 000,59 kgs from 485,42 kgs recorded in December 2012,” said Biti adding that nickel and palladium output increased to 739,3 tonnes and 767,7 tonnes up from 393,53 tonnes and 365,04 tonnes respectively.

“Gold output for January 2013 was 1 088,44 kgs, slightly higher than 1 084,20 kgs produced in December 2012,” Biti said.

Zimbabwe’s mining sector — which is poised to play an important role in economic revival — has been on the rebound buoyed by strong commodity prices and an improving local operating environment.

According to a mining report released recently by the Business Monitor International (BMI) Zimbabwe’s mining sector is set for rapid development as the country dramatically recovers from two decades of declining output.

Zimbabwe is richly endowed with deposits of chrome, gold, nickel and platinum, among other minerals, while the country’s gold reserves are among the largest in Africa.

BMI said although forecasting growth rates for the Zimbabwean mining sector is a highly uncertain process at present, with so much of the sector’s direction governed by political events, there is room for robust expansion.

“At base, we believe the scene is set for a period of strong growth, as the industry recovers from a disastrous period during the mid-2000s. The gold sector looks well-placed for growth, following its liberalisation in 2009, and thus we are forecasting a significant rise in gold output from 2011 levels, reaching 561koz in 2016, an annual average growth rate of 7,9 percent,” read part of the report.

The United Kingdom-based group forecasts similar strong rates of growth in platinum output, with annual average growth of 10 percent from 2011 levels.

“However, it is in diamond production that the country holds the most promise, having the potential to match the largest producers over the long term,” said BMI.

Despite the significant growth in the mining sector, economic experts say power cuts, labour disputes, loss of skilled workers and inadequate working capital are among factors that could slow growth of the mining industry.

The uncertainty has also been worsened by the promulgation of the indigenisation law and the sector has not had access to long-term finance for new projects or production expansion. - John Kachembere

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