Resolve constraints that hamper growth, says Chamb...

Resolve constraints that hamper growth, says Chamber of Mines

Bridget Mabanda

THE Chamber of Mines of Zimbabwe (CoMZ) says the mining industry has great potential to grow and maximise its contribution to the socio-economic development of the country but, this potential can be unlocked if key constraints to production and capacity utilisation are resolved.

CoMZ’s state of the mining industry survey report released yesterday stated that power outages, high-cost structure, foreign currency shortages, capital shortages, obsolete machinery and equipment are the key constraints that should be addressed.

“When further interrogated on mineral output prospects if the above constraints are addressed, analysis of survey data shows that the mining industry has the potential to grow by the approximately 11 percent. The prospects for mineral output growth for 2023 are generally lower than those recorded for 2022. Despite slowing down, positive output growth is expected across all key minerals,” reads the report.

Gold output is expected to rise to 45 tonnes next year from a projected 38,2 tonnes by the end of this year followed by platinum which is projected at 16,17 tonnes next year, 5 percent higher than an estimated 15,4 tonnes by year-end.

For capital expenditure, it is expected to be US$1 billion in 2023.

“Survey findings show that expenditure on capital projects is expected to slow down in 2023. Analysis of the survey data shows that a minimum cumulative capital expenditure of US$1 billion is expected in 2023. Of the capital projects, 72 percent are expected to be completed in the next 24 months,” said CoMZ.

Survey findings of the report show that profitability prospects for 2023 are subdued compared to those recorded for 2022 and most executives reported that their profitability will be weighed down by an anticipated high-cost structure driven by increases in energy cost, royalties and taxes.

In 2019, government said it will create a US$12 billion mining industry by 2023 as mining and agriculture are back-bones of economic recovery plan the government has been pursuing.