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(NEWZIMBABWE) Mining poised for 30 percent growth

Mining poised for 30 percent growth
by Business Reporter
03/09/2010 00:00:00

THE Zimbabwe Chamber of Mines has proffered a bullish assessment of the country’s mining prospects, predicting the sector could grow by as much as 30 percent in 2010.

Chamber president Victor Gapare said from Harare the figure could increase in 2011 if the Zimbabwe Power Supply Authority (ZESA) manages to meet demand and more power plants are constructed.

"As much as $160 million was spent by mines on local procurement in 2009 and this is projected to increase threefold in 2010 and significantly more in 2011 and beyond," Gapare said.

"The mining industry is on the verge of a mining boom, particularly if government retains the current mining fiscal regime and improves the investment climate, which is competitive and can attract the risk capital for exploration that is key for mining development."

Gapare also claimed that the easing of the economic restrictions in Zimbabwe should allow it to properly capitalise on favourable international platinum group metal (pgm) prices for the first time.

The country’s mining sector is seen as driving the country’s economic recovery after a decade-long decline on the back of a more enabling local operating environment and better world metal prices.

The ditching of the worthless Zimbabwe dollar and a raft of positive policy pronouncements by the coalition government saw several firms which had either completely closed their mines or scaled back to plant care and maintenance resume operations.

Platinum miner, Zimplats, has announced it is going ahead with a US$500 million project expected to boost output while diamond producer, Murowa has also indicated plans to implement a US$300 million expansion programme.

However some companies remain cautious about the expected boom.

DRA Mineral Resources, a South African project management and engineering group involved with the Unki, Mimosa and Ngezi mines said the expected boom depended on government implementing policies that presently remain on the drawing board.

"The Zimbabwe government is still getting back on its feet after the turmoil of the 2006 to 2008 economic meltdown," DRA director for projects Rodney Drew said in an interview with an industry publication.

"But, since Zimbabwe has decided that the mining industry is key to its recovery, we don't think it will be too long before everything falls into place, opening the way for new mines to be constructed."

Drew also explained that a number of bureaucratic hurdles are impacting on companies' plans to expand or bring their mining operations to Zimbabwe.

He noted that the Zimbabwe Revenue Authority (ZIMRA) and the Zimbabwe Immigration Ministry are putting pressure on both indigenous firms and their foreign contractors.

And with taxes remaining sky-high in the country - it has not signed a double tax agreement with South Africa since 1965 - Mr Drew claimed that mining projects are less appealing at present.

"DRA used to be able to brag that it could build a process plant more cheaply in Zimbabwe than it could in South Africa, but this is no longer the case," he added.

Labels: CHAMBER OF MINES ZIMBABWE, MINING, VICTOR GAPARE

posted by MrK @ 8:33 PM