Maravi

(TALKZIMBABWE) Beneficiation critical to Zim, says ministers

Beneficiation critical to Zim, says ministers
Metal Bulletin
Fri, 06 Nov 2009 03:32:00 +0000

THE Zimbabwean unity government will encourage investors in its mining sector to beneficiate their products within the country as much as possible, senior politicians said this week in Harare as they forecast double-digit growth in their economy next year.

“Value addition is of critical importance. Not simply refining ore, but adding value to the product...there is no way out of value addition unless we want to remain underdeveloped,” Elton Mangoma, the minister of economic planning and investment promotion, told journalists and analysts in Harare.

“Our focus shouldn’t just be on digging holes and extracting ore...we have gold, so there’s no reason why we can’t have a jewellery industry. We have diamonds – why should we sell them rough and uncut?” he said.

Deputy mines minister Murisi Zwizwai confirmed that the mining ministry is looking at specific commodities that could bring in investment from beneficiation.
“Incentives for beneficiation in gold, platinum, coal, copper and other non-ferrous ores and concentrate are being considered. Investment opportunities are vast in the area of value addition,” he said.

The Zimbabwean government will not introduce any legislation banning exports, Mangoma said, emphasising the government’s desire to encourage fresh investment in the country following years of economy difficulty.

“Business cannot be forced – we are not going into a command economy. We have no inclination to be legislating or banning anything. Instead, we will reduce the royalty for the value added portion. Incentives are better than strong-arm tactics,” he said.

His comments came as local press reported that the Minerals Marketing Commission of Zimbabwe has lifted the ban on exports of chrome ore and chrome fines for the next 18 months.

The government will look to tighten up regulations on mining licences, he said.

“We’re going to review who should hold a licence and how much they should pay. Licensing is going to be much stiffer,” Mangoma said.

Using revenue from its minerals and mining industry, the government will set up a wealth fund, Mangoma said, without giving more details.

“We should be able to create a wealth fund out of the mineral wealth – that is something we’re going to do,” he said, forecasting a strong performance for the country’s economy in 2010.

“The economy will grow in double digits, starting from next year,” he said, before listing the debts Zimbabwe has incurred in the past few years.

“We owe the IMF, the World Bank and the African Development Bank close to $3 billion. We owe the Paris Club $1.6 billion. We owe the world $5.7 billion,” he said. “Our GDP was about $3.4 billion last year – we clearly don’t want to add to that stockpile of debt.”

The government is reluctant to accept more aid and is keener to encourage direct cash injections from private investors, he said.

“The best way of getting money in is via investors – via private investors...Our model is based on investment – not loans, but investment,” he said.

Zimbabwe will accept investment from any country and has no reservations about the potential for the heavy Chinese investment such as that seen in the Democratic Republic of Congo (DRC).

There is already some Chinese investment in Zimbabwe, including Sinosteel’s ownership of ferro-chrome producer Zimasco, but there are fewer migrant Chinese workers in Zimbabwe than in the DRC, African market sources said.

“We’re treating every country virtually the same,” Mangoma said.

Mangoma stressed the ease of doing business in Zimbabwe following the dollarization of the economy in January this year.

Ministers at the meeting ruled out a return to the Zimbabwean dollar or the launch of a new currency in the short term, saying that their decision on which currency to use would depend on the performance of the country’s economy.

“The exchange control regulations are very user-friendly...You can bring in and take out $10,000 – that’s more than you can do in [many] other countries,” he said.

The business environment has improved greatly since last year, Mwana Africa representatives said, pointing out that they were paid by the government within 16 days of delivering the gold from the newly reopened Freda Rebecca mine.

The company put the mine on care and maintenance in March 2007 because the country’s marketing arrangements for the yellow metal left the company no margin, Freda Rebecca’s general manager Tich Chivonivoni told MB.

There are also opportunities for investing in the country’s underfunded power grid and in its railways, ministers said.

Mining accounts for 30% of all Zimbabwean energy consumption, and the mining sector will struggle to expand and recover without investment in power, they noted.

Zimasco has given the government power utility Zesa a loan to expand the Hwange colliery and the government is also looking at opportunities in biofuels, wind and solar power, they said.

Domestic power demand of 2,100 MW outstrips supply by as much as 1,000 MW. With imports supplying another 300 MW, there is a shortfall of some 600 MW.

Mangoma also sought to reassure the meeting that the unity government will hold firm despite recent press reports of the MDC’s disengagement from the cabinet.

“The inclusive government is going to be there. The prime minister didn’t talk about disengagement with the government, he talked about disengagement from Zanu PF. Sometimes in the media here, it seems that Zanu PF confuses itself with the government, but the president does not have the powers that he purports to have.”

“We don’t see disengagement being a feature – the ministers here are from the MDC. We are doing our jobs and we will continue to do our jobs,” he said.

Labels: MANUFACTURING, VALUE ADDITION

posted by MrK @ 7:22 AM