Zimbabwe, which is home to over 60 mineral occurrences, including gold platinum and diamonds, might need as much as $15 billion to procure new equipment, ramp up production and explore new mineral reserves or replenish depleting assets, the mining industry’s representative body has said.
The country has potential to export minerals worth $18 billion annually if the mining sector is fully supported.
The mining sector represents significant opportunity for foreign direct investment (FDI) into the country; specifically into the mining sector where some Zimbabwe Stock Exchange-listed miners have confirmed enquiries have grown exponentially since the onset of the new dispensation in November last year.
President Mnangagwa said foreign investors have to date committed more than $11 billion worth of investments across all sectors, but significantly into mining, which generates over 60 percent of the country’s annual export earnings.
The country has an extensive array of good quality mineral grades with potential to attract investment running into billions of dollars for retooling, ramping up output and starting new mines, the Chamber of Mines of Zimbabwe (CoMZ) says.
While CoMZ’s recent study concluded that Zimbabwe needed a minimum of $7 billion in fresh capital, it pointed out that the figure was conservative, as the mining sector might require significantly more, as some projects were not included.
Indications are that the sector might need as much as $15 billion, including the funding needs of investment proposed for implementation in the near future, a figure marginally short of the country’s $14 billion gross domestic product (GDP) value.
The mining sector generates about 60 percent of Zimbabwe’s annual export earnings; half of it coming from gold and platinum. According to CoMZ, the $7 billion represents the minimum funding required for existing assets, excluding projects in which the Government has direct interest.
Government has expansive interest in mining through State-owned conglomerate Zimbabwe Mining Development Corporation (ZMDC), which exclusively controls all diamond mines and also owns emerald, gold, tin, copper and platinum assets.
However, the $15 billion estimated fresh capital the sector may require excluded requirements of planned projects that have not taken off, but have good chances of being implemented.
The excluded projects include the $4,2 billion platinum project mining proposed by Cypriot firm, Karo Resources, and the $1,2 billion lithium project ZMDC is implementing together with Canadian firm Chimata Gold Corp at Kamativi.
Chamber of Mines chief executive Isaac Kwesu, confirmed that the mineral rich Southern African country’s funding needs for mining projects did not exclude pending investments planned such as lithium and new platinum projects.
Two more multimillion dollar lithium mining projects, Zulu Project and the Arcadia Project are at different levels of development.
“The $7 billion is for replacement of warn out equipment; it needs funding because it is outdated and you need to replace. Mines need to ramp up, develop new mines, to increase installed capacity; so that number ($7 billion) is on the lower side.
Kwesu said while the figures looked daunting, the country had some “quality gold assets that compete globally in terms of grades”.
Mines and Mining Development Minister Winston Chitando recently said the now stable operating environment presented better opportunities for planning and execution of mining projects.
Kwesu also said significant amounts were required for exploration.
“We have not been exploring to make new discoveries. Also, mines need new technology, what was not economic years back may be economic now, with new technology,” Kwesu said.
Zimbabwe also has some of the best platinum mines were found in only a few places across the world and these include Implats 87 percent owned Zimplats, Implats and Sibanye Stillwater 50-50 owned entity Mimosa Mining Company and Anglo-American’s Unki Mines.
But beyond the needs of existing mines, the industry will require significant amounts of capital for projects that still are at planning level.