CoMZ conference hinged on power, long-term capital

26 May, 2023 - 00:05 0 Views
CoMZ conference hinged on power, long-term capital

eBusiness Weekly

Michael Tome Business Writer

CHAMBER of Mines Zimbabwe (CoMZ) says its annual conference slated for next week in the resort town of Victoria Falls will be hinged on finding panacea to the crippling power outages and lack of long-term capital currently experienced by sector players.

Isaac Kwesu the CoMZ chief executive said the mining industry requires a stable and supportive environment, therefore the conference will be used to iron out some of the sticky issues inhibiting the flawless performance of the industry.

The mining sector has the potential to improve from its current growth levels but it remains repressed by some bottlenecks chief among them inconsistent power supply.

Lack of electricity has had a significant impact on operations in Zimbabwe, a country that relies heavily on mining for foreign currency earnings and employment.

Without a reliable and sufficient supply of electricity, mining operations are disrupted or even come to a complete halt, a position that has led to production and profitability decline on the part of primary producers.

Power outages have lately been affecting the mining business in a big way specifically for firms that are not connected to dedicated power lines.

Just this week, RioZim said production at Renco mine fell by 2 percent during the period under review as it faced power supply challenges. The group said the mine is focused on investments in additional generators to increase capacity and coverage of the key activities in the mine’s production.”Production fell by 2 percent from the same period in the prior year.” Power supply challenges worsened during the quarter due to load shedding and unstable power infrastructure.” The mine is focused on stabilising power supply to the mine to achieve stable production and various initiatives are being pursued including, among other efforts, investment in additional generators to increase capacity and coverage of the key activities in the mine’s production critical path,” said RioZim.

Kwesu also indicated that funding gaps were also stalling the industry’s performance, killing its inherent potential to contribute to the country’s export earnings.

Lack of long-term capital remains a stumbling block to the realisation of a sound mining industry, which typically requires large investments in equipment, infrastructure, and exploration to develop and maintain operations over an extended period.

Without access to long-term capital, mining companies are struggling to finance investments, thereby limiting their ability to grow and remain competitive in the industry.

Kwesu said the industry has to grow but that needs specific challenges to be addressed, thus the conference’s resolve to dig deeper into baseline issues killing various mineral sub-sectors.

He said the issue of capital shortages remains a thorny issue, given the funding gap for both sustenance of operations and ramp-up.

“The annual convention will look in detail at how best the industry and authorities can address energy challenges that keep undermining the mining industry.

“We will also be looking at crafting financial solutions, as you know mining industry requires long-term capital, so we need to find providers for financial solutions, as well as investors with interest in our mining sector, looking at how best they can support us,” said Kwesu.

In an interview, mining Industry expert Godknows Chipindu indicated that Government and mining industry stakeholders should work hand in hand to strengthen regulatory frameworks and improve the local investment climate.

He said this can help to build investor confidence which in turn paves way for long-term funding into the industry.

“To address the lack of long-term capital in the mining sector, the Zimbabwean government and mining industry stakeholders should work to improve the investment climate, strengthen regulatory frameworks, and promote transparency and accountability in the sector,” he said.

Mines and Mineral Development Minister, Winston Chitando will be the guest of honour at the event, while the Reserve Bank of Zimbabwe (RBZ) Governor Dr. John Mangudya is expected to share policy direction, monetary issues and foreign exchange developments given that the sector is one of the key sectors that contribute significantly to the country’s foreign-currency earnings.

Several international speakers have been invited to cross-pollinate ideas on how best Zimbabwe can leverage the expansive mining sector with particular focus on maximizing emergent lithium resources and the battery mineral value chain.

These include George Botshiwe, the Second Vice president at Chamber of Mines, Namibia and Thungela chief executive officer July Ndlovu.

In 2022, the mining industry attained US$5,4 billion in exports against a targeted projection of US$8 billion in export earnings contributing more than 80 percent of the national export value, thus mining sector has become the centrepiece in driving the economy directly as well as through its indirect linkages with other key sectors of the economy.

Outcomes from the convention are expected to assist in the growth and development of the local mining industry in the medium to long term.

Mining industry has lately been lamenting the uneven economic environment citing that miners had to contend with high operating cost structures, inflation and exchange rate disparities.

Industry players with expert knowledge in key mineral subsectors mainly gold, platinum, coal , lithium nickel and ferrochrome have also been invited to share in-depth insights about the sub sectors operations.

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