Mining sector contributes over 70% of country’s forex earnings

By ZBC Reporter

Zimbabwe’s economic revival process is being oiled by the mining sector, which has since January contributed over 70 percent of the country’s foreign currency earnings.

The 2021 state of the mining industry report, released at an event attended by mining executives, central bank officials, government ministers and representatives of the private sector this Thursday, indicates that the mining sector has contributed four comma four billion United States dollars to the country’s foreign currency needs.

Presenting the findings of the report, lead researcher Professor Albert Makochekanwa provided figures on how the mining sector has continued to register increased production.

Generally mining executives are confident about the prospects for their businesses in 2022, notably among the positive sentiments include optimism about commodity price outlook, improvement ion capacity utilisation and anticipated mineral output growth, he said.

Another Researcher, Dr Carren Pindiriri provided details on how there is increased optimism in the sector.

Despite some operational viability challenges, the sector is however confident about growth next year. The outlook will however depend on stakeholder commitment to solve fiscal policy challenges, exchange rate disparities and energy infrastructure among others, said Pindiririri.

Other key highlights of the report include continued growth in mineral earnings, viable global commodity prices, increased capacity utilisation, mitigation of COVID-19 threats to the sector, investment climate trends, access to hard cash, costs of capital and operational constraints, among others.

Meanwhile a huge boost for the mining sector is imminent as supply is set to be expanded by at least an additional one  thousand mega watts next year according to power utility ZESA.

The forecast will suffice to address the gaps that accounted for 17 percent of the cost drivers incurred by the sector over the last year according to Zimbabwe Electricity Transmission and Distribution Managing Director Engineer Howard Choga.

We have managed to secure deals with regional partners and also work on our local generation capacities that should improve our outcomes next year. Some of the projects will be operational by the end of the year while the other projects will become effective early next year,he said.

RBZ Governor Dr John Mangudya is of the view that enhanced power supply will be critical to anchor the expected growth in the mining industry and so will be the monetary incentives that have also been outlined by the central bank.

The central bank is looking into all the concerns raised by the mining sector so that we can reach an agreement on what needs to be done to take this sector further, however I can  assure the sector of commitment to provide more incentives depending on how the sector ramps up production,he noted.

Mining companies are also expecting incentives on equipment and access to cheap capital to ring fence the projected northward performance.

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