Zimbabwe takes F D I drive to Canada

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Minister Winston Chitando

Golden Sibanda
A Zimbabwean delegation comprising government and private sector officials descends on Canada next week to lure Foreign Direct investment (FDI) into its lucrative mining sector from one of the world’s most attractive mining regions, continuing a charm offensive for capital inflows into the economy.

The Southern African country has organised a Mining Indaba (Conference) in Canada on June 6 and 7 amid a frenzied interest in the mining industry and at a time the Government is discussing with an unidentified potential investor with about $5 billion to invest in various mining projects.

Billions of dollars in similar pledges having already been received by the government from across the globe.

Official data indicates that Zimbabwe is actively mining only 10 out of a possible 60 minerals, which underlines the huge upside potential of the country’s mining sector. Key minerals being mined include gold, platinum, diamonds, nickel coal, copper, chrome and new kid on the block, lithium.

Already, some reputable mining firms are operating in Zimbabwe including Impala Platinum (Zimplats), Anglo-American (Unki Mines), Aquarius and Sibanye Stillwater (Mimosa Mining Company), Metallon Corporation (Mazowe, Redwing and Shamva) and Rio Tinto (Murowa Diamonds).

The Zimbabwe is Open for Business (ZOP) Forum is organising the Zimbabwe Mining Investment Indaba in Toronto. “It is an interaction with the investors in Canada that has been put together to present investment opportunities in Zimbabwe. We are going with private sector; mines that are travelling and need capital will be able to present their investment cases. There will be match making opportunities,” said Mungwari, a ZOB Forum official.

Zimbabwe government ministers, from key economic ministries, and officials from state departments with a strong bearing on investment, will attend the two-day conference in the Canadian capital.

Dubbed Zimbabwe Mining Indaba, the conference comes on the heels of recent similar engagement in world leading financial capital, London, where Government officials and mining executives met foreign investors, including officials from the London Stock Exchange, to tell the Zimbabwe story.

Rationale for Indaba in Canada
The match-making conference will provide a platform on which Government will explain Zimbabwe’s economic policies, vision, plans for the future and opportunities in the mining sector while mining firms operating in Zimbabwe will get an opportunity to scout for capital from deep pocketed investors to fund mineral exploration and expansion.

Mines and Mining Development Minister Winston Chitando confirmed the trip to Canada, saying it underlined the growing investor interest in Zimbabwe’s mining sector.“There is (also) a potential investor whom we are talking to and who wants to invest up to $5 billion in a number of assets.”

“I cannot name the investor because we are still in preliminary discussions,” Minister Chitando told Business Weekly this week.

Growing interest in mining
A fortnight ago, during the Chamber of Mines of Zimbabwe (CoMZ) annual general meeting and conference in Victoria Falls, Minister Chitando said that there had been overwhelming interest from global investors in Zimbabwe when Government organized similar mining Indabas in Harare, Johannesburg and London. He said since November 2018, more than $15 billion in FDI had been committed to Zimbabwe.

The Minister noted that in recent years, Zimbabwe had attracted little new investment into actual mining and mineral exploration due to perceived country risk, policy inconsistencies and unpredictability, but pledged Government support in creating an environment conducive for business.

Capital mobilization platform
CoMZ president Isaac Kwesu said that the mining investment conference slated for Canada was a platform where mining firms seeking project capital would be able to link up with potential funders and investors to mobilize capital or seal linkages with mining equipment suppliers and companies that provide beneficiation facilities.

Overall, Zimbabwe has attracted an average of $400 million per annum in FDI into all the sectors of the economy in recent years, compared to averages of $3 billion to $12 billion that went to its less mineral endowed regional peers.

“So, the essence really is a custom mobilizing showcase where we will present cases and opportunities available in Zimbabwe. We will have Cabinet ministers talking about what Government has been doing trying to make Zimbabwe an attractive investment destination for capital,” he said.

“As such, they will outline regulations and policies of the Government. Then we will have specific mining houses presenting their projects and what capital they may require, as well as other areas of cooperation with Canadian business associations or financial institutions,” Kwesu said.

Mining a strategic sector
Mining is a key and strategic sector for the Zimbabwean economy, accounting for between 12 percent and 16 percent of the country’s gross domestic product (GDP). The sector also generates about 60 percent of the country’s annual export earnings, over half from gold and platinum.

Government has designated the mining industry to anchor Zimbabwe’s economic growth in the short to medium term, scrapping the indigenisation laws, seen as detrimental to attracting FDI into mining, from applying to the extractive sector, except diamond and platinum, to woo FDI into mining.

Even then, leaving the two minerals was deliberate and only temporary as this was meant only to allow the Government to develop a beneficiation policy and thereafter repeal the law to stop applying to these two, as well.

Government is targeting to grow the mining industry to an $18 billion industry by 2030, when Zimbabwe is projected to have attained middle income status.

Canada leads the pack on mining
Canada has been ranked the world’s most attractive region for mining investment in the latest annual mining survey conducted by the Fraser Institute.

The North American country leapfrogged Australia to become the world’s leading mining investment destination, based on the combined rankings of all its provinces and territories.

The survey ranked Nevada, Ireland and Western Australia in the top five regions for attractiveness of mining investment. Quebec, Ontario, Chile, Arizona and Alaska completed the list of highest ranking jurisdictions.

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