Economy to leverage on mining

Government seeks to leverage on ample opportunities in the extractive sector in the next 2 years and has put in place a raft of interventions to augment productivity in mining which has been the country’s major export segment at a time when performance in other key productive sectors of agriculture and manufacturing was subdued.

Owing to erratic rainfall in successive years and lack of competitiveness of locally produced products on the market, the agriculture and manufacturing sectors, respectively, have been dampened, whilst mining has raked over 53 percent of total exports since 2009 despite low global commodity prices.

In the 2 year, Interim Poverty Reduction Strategy Paper; I-PRSP (2016-2018) launched last week; Government seeks to accelerate the formalization of artisanal and small scale miners at the same time encouraging co-existence of large mining firms and small scale miners.

I-PRSP is a government economic approach to mitigate poverty, consistent with the economic blueprint ZIMASSET and mining has been identified as one key sector that has the potential to cap rising poverty levels as evidenced by the increase in small scale miners trying to eke a living as formal employment continues to shrink.

Government aims at setting up multiple service centers across the country to assist the small scale miners’ access to milling facilities and equipment hire at nominal rates as well as free technical extension services in geology, mining and metallurgy with one service center nearing completion in Zhombe, Midlands province.

In a bid to encourage formalization of artisanal and small scale miners, Government will continue with the syndication programme in which prospective small scale miners register mining claims in groups of six individuals or more in order to improve capacity to pay registration fees and access government assistance from initiatives such as the US$ 100 million XCMG China loan earmarked for the growth of the sub-sector.

The document will be used to cajole capital injection from international financiers as it sets straight the country’s economic targets.

“Let me say at this juncture that Treasury intends to use this document as a basis for negotiations to secure funding from the World Bank in the event that Zimbabwe – World Bank relations are normalized following successful clearance of arrears. The document will also be used in guiding Government policy formulation,” Finance and Economic Planning Minister, Patrick Chinamasa said at the launch.

He said government through development partners have already secured US$ 800 million to finance the proposed targets across all sectors of the economic including mining, and the remaining US$ 1.9 billion will be mobilized locally and from other external partners.

The Reserve Bank of Zimbabwe Governor Dr John Mangudya in his monetary policy statement outlined that the Central Bank has already secured a US$ 20 million gold development initiative facility through RBZ subsidiary, Fidelity Printers and Refiners to support small mining operations in a bid to increase gold production.

“The US$ 20 million facility is really a lot of money that is going to help the small scale and artisanal miners and this money is actually even going to be handy in setting up of service centers. The challenge might that be given the number of artisanal miners its quiet difficult to cater for everyone because numbers are growing as employment opportunities are thinning,” said Zimbabwe Miners Federation chief executive officer Mr Wellington Takavarasha.

He said they had pleaded with government to reduce mining fees which were too high for most of the small scale miners a situation which was derailing the formalization process as most artisanal miners were being deterred by the high cost of registration.

Zimbabwe is believed to have lost billions of dollars through the sale of its minerals by small scale miners on the black market.

The country’s mining sector remain underexplored as the last state of the mining industry report (2015) suggest that the majority of the country’s over 40 minerals beneath its surface is lying untapped. The results revealed that out of its highly diversified mineral endowment, the country generates over 90 percent of its total mineral output value from only 5 minerals.

The top 5 minerals by output value were gold (40%), platinum (21%), palladium (11%), diamond (11%) and nickel (8%) with a few more minerals contributing the remaining less than 10 percent.