The world’s largest platinum miner, Impala Platinum Holdings, says Zimbabwe’s political risk profile is improving since President Emmerson Mnangagwa took over power in November last year.
Implats, which holds 87 percent stake in Australia stock Exchange-listed Zimplats, said this in a recent paper titled “New Mining Opportunities in Zimbabwe,” pointing out that the mining industry had greatly benefited from this changing profile.
Zimbabwe has more than 40 mineral occurrences among them gold, platinum, diamonds, nickel, chrome, coal and asbestos. Only 10 percent of the country’s minerals have to date been commercially exploited.
Mining is projected to earn Zimbabwe $3,7 billion this year from $2,6 billion last year, which represented about 60 percent of annual exports.
Zimbabwe targets to grow the mining sector into an $18 billion industry by 2030.
President Mnangagwa’s Government has designated mining as the driver of Zimbabwe’s short to medium growth.
President Mnangagwa took over the reins of power in November last year after the resignation of former president Robert Mugabe, who led Zimbabwe since the country gained independence from Britain in 1980.
The platinum group metals (PGMs) miner said during Mugabe’s rule, the country’s risk profile increased. Zimbabwe was last year ranked 124 out of 137 on the World Economic Forums Global Competitiveness Index.
Further, the World Bank ranked the Southern African country on number 159 on its Ease of Doing Business out of 189 countries surveyed, reflecting the country’s lack of attractiveness to foreign investors.
But positive changes have already started to appear since the new dispensation, which saw the Zimbabwe Investment Authority approve a record $16,7 billion project proposals in the first six months of this year.
“Zimbabwe’s country risk profile is positively changing following this change. Like many economic sectors, mining has been a beneficiary of the political change and new opportunities are emerging,” Implats said.
Implats said since 24 November, 2017 when President Mnangagwa took the oath of office following the resignation of former president Mugabe, after a military intervention codenamed “Operation Restore Legacy”, there now was renewed optimism around Zimbabwe’s economy.
The new dispensation has been driving the mantra “Zimbabwe is open for business” and “the new Government appears to be saying the right things.”
The new policy thrust has been characterized by key pronouncements such as focus on the economy not politics, amendment of indigenisation policy, anti-corruption drive, commitment to free, fair and credible elections, respect for property rights, aggressive international re-engagement and pledge for investor protection.
For the first time since independence, a Zimbabwe head of State (President Mnangagwa) attended the World Economic Foreign early this year in a sign of thawing relations between the country and the west.
Implats said that a number of scenarios were key to the growth of the PGM sector including policy and leadership consistency, finality to indigenisation, free, fair and credible elections, promoting economic development, foreign direct investment and clear legislative guidelines supporting mining investment in among other things.
Implats said it was the first platinum mining company to commit to and ensure operational sustainability in Zimbabwe and that even in challenging times, its local PGM mining unit Zimplats had proven to be the lowest cost producer in the Implats portfolio with the highest free cash flow.