Zim platinum output depressed

HARARE - Zimbabwe's platinum production was depressed in the half-year to June 2013, increasing by a marginal two percent to 6,6 tonnes from 6,4 tonnes in prior comparable period.

According to the latest Chamber of Mines of Zimbabwe (CoMZ) data, the country — sitting on the second largest known platinum reserves in the world after South Africa — realised $292 million in revenue from the white metal during the period under review, up from $285 million.

Apart from the vast platinum reserves, Zimbabwe also has significant deposits of gold, nickel, diamonds and coal among other key minerals.

This comes as economic experts say the country’s huge platinum reserves may raise hopes in the mining sector’s contribution to the stuttering economy, despite being currently saddled with uncertainty following 89-year-old President Robert Mugabe’s election victory.

While Zimbabwe’s mining sector is currently growing steadily, the broader economy is now on stagnation mode after recovering briefly from its economic depression a few years ago when inflation was at 231 million percent.

Recently, Finance minister Tendai Biti revised downwards the country’seconomic growth target to 3,4 percent from five percent.

The Treasury chief said developments in the first half of the year “indicate evidence of stagnation, particularly through under-performance in the key sectors of agriculture and mining.”

“Mining sector’s growth has been revised downwards from 17,1 percent to 5,3 percent while the agriculture sector is now expected to grow by 5,4 percent from the initial 6,4 percent,” he said while presenting his mid-term budget, adding that the downward revision in agriculture growth was due to a poor 2012/2013 rainy season.

Overall, CoMZ’s data indicated that the mining sector’s revenue inflows dipped 18 percent to $930 million compared with $1,1 billion recorded in previous comparable period.

During the half year, total gold production volumes plunged by 22 percent to 6,7 tonnes from 8,6 tonnes in prior period.

High production costs, the lack of long-term capital and depressed global metal prices are threatening viability of the mining industry.

In the period under review, the yellow metal’s revenues were $326 million compared to $449 million recorded in previous period.

This development comes as mining companies in Zimbabwe remitted $81,1 million to government in royalties during the six months to June 2013.

Since 2009, the mining sector has been one of the sectors anchoring the growth recovery process in Zimbabwe, contributing an estimated 16 percent to gross domestic product in 2012, up from 13 percent in 2011.

The sector also continued to lead in export earnings, rising to $2 billion in 2012, from $1,8 billion in 2011, with major drivers of this growth in export earnings being diamonds, platinum and gold.

This comes as analysts point out that the country must implement mining sector reforms to achieve sustainable economic growth.

The southern African country — which is still reeling from hangover of a decade-long economic meltdown — is in the process of developing a mineral policy that seeks to, among other things, address challenges affecting the sector and explore ways of attracting investment to the sector.

To date, the Mines and Mining Development ministry has held consultations with stakeholders countrywide to solicit views and enhance stakeholder buy-in on the draft policy.

However, there has been resistance from other stakeholders on the draft policy — which proposes to establish an internationally competitive, stable and conducive business climate to attract and sustain foreign and local investment, while ensuring equitable distribution of benefits from mining activities to meet both current and future needs.

After CoMZ’s annual general meeting (AGM) in May, the mining’s representative body rejected a proposal for the State to control mineral production and prices.

“We will contribute effectively to the on-going development of a new mining policy. We do not regard our role as opposition to government but partners seeking the same national goal and aspiration,” said Alex Mhembere, president of the Chamber of Mines.

The mining draft policy further proposes to overhaul the Mines and Minerals Act and introduce new minerals development legislation that will maximise the impact of mineral assets on growth and development.

Tendai Biti recently revised downwards the mining sector’s growth target from 17,1 percent to 5,3 percent due under-performance of the resources industry in the six months to June 2013.

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.