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Bianca Mlilo, Business Reporter
CAPACITY utilisation in the coal and nickel mining sectors dropped to below 30 percent and 45 percent respectively this year due to shortage of working capital, a report has revealed.

Average capacity utilisation for the year was 64 percent, up from 60 percent last year.

In its annual state of the mining industry survey, the Chamber of Mines Zimbabwe (CoMZ) indicated that part of the mining sector had realised increased capacity utilisation.

“Declines in capacity utilisation levels were recorded in respect of coal from 50 percent to 30 percent and nickel from 55 percent to 41 percent,” said CoMZ in the report.

“Average capacity utilisation for the mining sector increased from 60 percent in 2015, to 64 percent in 2016. The platinum sector continues to operate at full capacity, while gold recorded an increase to 79 percent from 77 percent in 2015.”

All respondents operating below full capacity, said CoMZ, mentioned capital shortages as the major constraint undermining capacity utilisation, coupled with high cost structure and ageing equipment.

Other challenges faced by the coal mining sector are a high debt overhang and non-payment of deliveries by major clients.

Makomo Resources, now the country’s largest thermal coal producer in October said it is owed about $25 million by its largest customer, the Zimbabwe Power Company (ZPC).

The situation has impacted negatively on some of the miner’s developmental projects, management said.

Makomo Resources produces about 160 000 tonnes monthly and intends to up production to 300 000 tonnes of coal per month.

Makomo rose to greatness in 2013, overtaking Hwange Colliery Company Limited which is facing viability challenges.

The state of the mining industry survey seeks to assess the performance of the sector, including recent trends and developments, challenges, risks and opportunities.

It also gauges the level of business confidence in the mining industry and provides Government and other stakeholders basis upon which to craft appropriate policies and strategies.

These would be used to foster growth and development of the mining sector and generating statistical and descriptive mining data.

@BiancaMlilo