Mining to contribute 70% forex earnings Mr Munesu Munodawafa
Mr Munesu Munodawafa

Mr Munesu Munodawafa

Oliver Kazunga, Senior Business Reporter
ZIMBABWE’s mining sector is expected to contribute over 70 percent of foreign currency earnings this year riding on renewed interest and investor confidence being created by the new political administration.

Permanent Secretary in the Ministry of Mines and Mining Development Mr Munesu Munodawafa said this during a panel discussion at the Institute of Chartered Accountants of Zimbabwe meeting held at the Zimbabwe International Trade Fair in Bulawayo yesterday.

Official figures from the Zimbabwe National Statistics Agency (Zimstat) show that last year the country earned about $3,5 billion in export earnings with the mining sector contributing less than 70 percent in export receipts.

“We don’t expect the numbers (export earnings) to be less this year. We have got very strong human resources and with the new dispensation, we have seen an increase in the number and quality of investors wanting to invest in Zimbabwe,” he said.

“Since the new dispensation, and I am talking about the state of the mining sector, we have seen a number of things that have started to happen certainly from where l sit. One of the things that we have seen is a renewed and unprecedented number of potential investors that have come into our offices.

“The quality of investors that are coming through is totally different from what we used to get, maybe we have now pronounced at the highest level the ‘Zimbabwe is open for business’ from all fronts.”

Mr Munodawafa said the review of laws such as the Indigenisation and Economic Empowerment Act by the Government has also ushered investor confidence in recent months.

“Like other sectors, the mining sector, because it is capital intensive, is one of those that was hit hardest by the previous 51/49 percent requirement under the Indigenisation and Economic Empowerment Act.

“So, the question then becomes how you do then bankroll that and thus the indigenisation law as it stood then was one of the biggest challenges that we faced in terms of growth of that sub-sector,” said Mr Munodawafa.

In the context of the Finance Act that has just been passed into law, the 51/49 percent requirement is now only applicable to platinum and diamond sub-sectors. Mr Munodawafa said in his view, this was also the reason why the Government was able to structure the $4.2 billion platinum investment project, which was the latest and biggest single deal Zimbabwe has ever had.

Last month, a Cyprus-based investor, Karo Resources signed a $4,2 billion deal to develop a platinum mine and refinery in the country.

Situated in the Mhondoro –Ngezi platinum belt, the investment project will include a coal mine and power station to produce electricity for the smelter.
When fully implemented, the project is expected to employ 15 000 people.

Mr Munodawafa said the re-opening of previously closed mines was also exciting as this would go a long way in driving growth of the mining industry at large.

He said Zimbabwe’s mining sector was poised for significant growth as the country has in recent months registered a positive trajectory in the number of ferrochrome smelters.

“We have also seen investment in the mining sector also coming through the mode of capital inflows into the country. We have seen over the last six or so months, the growth of the ferrochrome smelting industry. In the past we used to have Zimasco and ZimAlloys, but we now have 12 or so,” he said.

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