US$12bn mining industry: More questions arise

30 Sep, 2022 - 00:09 0 Views
US$12bn mining  industry: More  questions arise Industries are one of the business sectors that support the economy and with the constant load shedding the economy of the country is bound not to fully succeed

eBusiness Weekly

Tapiwanashe Mangwiro

Zimbabwe is targeting a US$12 billion mining sector by the end of 2023, and analysts and mining experts have questioned if the country will be able to meet the deadline.

Currently, the mining sector is now valued at US$7 billion, leaving the industry needing to create US$5 billion wealth in 15 months. The ministry is confident they will achieve the target but industry experts say the strides are there but not to bring desired fruits in the given time. However, mining experts have rebuffed the contribution of new mines saying maturity of a mine comes around 5-8 years and the impact will be felt in 10 years’ time at most.

Current sSituation

The Mines and Mining Development deputy minister, Polite Kambamura said; “It is true that the mining industry is now a US$7 billion industry and we are confident that we will meet the US$12 billion industry target by the end of 2023.”

But Engineer Emmanuel Nhende, an operations executive for a local gold mine noted; “We are at US$7 billion now so I am not seeing any projects maturing to cover that US$5 billion. Yes, there is the Manhize project and the Lithium projects coming in but definitely not in 15 months. The positive is that they are being implemented.”

Kambamura said they are looking to bridge the US$5 billion gap through planned industry expansion and the ones currently underway. Other projects that will cover the gap are at various stages of completion with some at 85 percent and others 95 percent.

Nhende added that, most major mining projects take up to 10 years from bankable feasibility study to full production and you cannot cut down that cycle.

Mining sector developments

A mines expert who requested for anonymity said the country needs a combination of new mines and the expansion of existing mines, one needs a sustained investment in the period of expansion.

“We do not have any projects in the gold and platinum sector that are being expected to come online in the next 15 months, which makes it difficult to meet the target. Besides new mines, the existing ones are not being expanded as well,” the expert said.

According to the expert, the positive thing that has happened in the past year is that the mining affairs board started to issue exclusive prospecting orders which was last done over 20 years ago. If development of those prospectus is done then we can develop new mines, but for that to come together, we need about 5-10 years.

There are three established platinum producers in Zimplats, Mimosa and Unki, then Great Dyke which had reached the mining stage has almost ground to a halt due to funding and geotechnical challenges. Karo resources has brought up a statement or two but besides that they do not look like they will be producing anything in the coming months.

In the platinum sector there is a mine called Todall Mine in Shurugwi, they have been hovering around, but nothing is also pointing out that mine development will happen anytime soon.

According to the expert in the platinum sector, it is just the three existing mines and nothing else to look at in the next 15 months.

In the lithium sector, the only mine that is producing the mineral is Bikita Mine and the others are at different stages of development. Arcadia Mine which was recently purchased by the Chinese has been very aggressive in development but will not yet move into major production in the period under review.

The Mistress Mine which is in the Mazowe area, has potential, but nothing has been said about them producing at a large scale, although they have the resource in abundance.

Eng. Stephen Chifamba said coal players have increased and projects have been developed in the Hwange area, which have begun production.

“We have seen a number of coal mines come online with the likes of Sengwa, Zhong Jian, Zambezi Gas and Coal mine and Lubu Coal Project in the Hwange valley,” Chifamba said.

Will power come to the party?

Taking it from the perspective of oncoming developments, this means that the country will have to increase energy production by four to five fold in order to meet these requirements or the country will have to fork out even more foreign currency to energy imports yet it is targeting at preserving the hard earned foreign currency.

Zimbabwe Electricity Supply Authority (ZESA) has said the mining industry alone has put in applications for an additional 2 100MW by 2025 to support new projects and expansion.

“The increase in mining industry demand is also inducing other significant industrial loads,” according to ZESA executive chairman Sydney Gata.

A source in the power utility said they were facing challenges with old machinery which keeps breaking down and warned that the country might face another blackout as was experienced during this week if power generation remains poor. Currently big mines have been ring fenced on power, but at an additional cost, which then puts smaller mines out of contention as it means costs of production increase.

“A total of 300MW are coming online in November and the dry run has already begun at Hwange unit 7, but it is our project management which is poor as we have been talking of Batoka since 2013 but nothing has come to fruition,” the source said.

This means that even when the 600MW from Hwange eventually comes on stream, Zimbabwe will still face a power deficit over the next few years.


According to Nhende, risk wise, we have to overcome the power supply constraints first, and also have to factor in politics as uncertainty slows down investment commitments getting into an election year. Investors tend to hold back a bit to see the outcome then make decisions.

“So 2023 is too tight, I would give us at least another three years to allow maturity of current projects. To reach US$12 billion in 15 months from US$7 billion when they have only moved up by about US$2-3 billion in the last couple of years is an impossible task to be honest,” Nhende said.

Chifamba said the mining industry surely does have the promise as things have been moving, but it’s the timeframe that industry is not in line with. The source within ZESA said besides Hwange 7 and 8, we are only looking at the repowering of the Bulawayo thermal power plant which is supposed to add 100MW to the grid in 24 months.

Besides the two projects, power generation in Zimbabwe is going to be dampened hence it will leave the mining sector efforts in limbo if imports are also strained.

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