By Taurai Mazwi
Zimbabwe is endowed with lots of mineral resources, most, if not all of them, contribute a lot to the socio-economic development of Zimbabwe. It is due to these natural riches the country has, that the mining sector is key to economic development in the country.
The Mining Sector is viewed as a locomotive of Zimbabwe’s development agenda and under the New Dispensation, mining is taking a crucial role in the revival of the economy. Mining in most countries is well known for its contribution to export earnings and it creates employment as well, thereby providing significant opportunities for a country’s growth.
The exports in mining play an important role in the inflow of the much needed foreign currency needed in the country. The sector contributed over 60% of export of the country’s proceeds in the last 3 years maintained by critical minerals such as gold, PGMs, nickel and chrome.
The improved mining sectors’ contribution to the economy in the previous years has been anchored on increased output by small scale players, particularly in the gold sector.
The Reserve Bank of Zimbabwe has seen the potential in the mining sector, hence committed to ensure full potential of the small scale miners. As such, the Bank availed ZWL$150 million to the sector, through Fidelity Printers and Refiners (FPF) to fund both working capital and capex requirements under the Gold Support Facility.
The ZWL$150 million facility has since been reviewed upwards to ZWL$200 million to cater for increased demand since they know that the returns they get from mining are greater and help the country develop economically.
The Transitional Stabilisation Program (TSP) is said to have identified mining as having the potential to become the pillar of economic growth through value addition and beneficiation, which has been the missing link. With value addition and beneficiation there will be creation of employment, foreign exchange generation and economic and social benefits to mining communities.
The TSP is set to resuscitate closed mines under Zimbabwe Mining Development Corporation (ZMDC) through joint ventures and other initiatives. Government will allow duty free imports of equipment, thereby facilitating the resumption of operations. This goes to show how much support the mining industry is getting from many corners in its endeavour to bring greater returns to the economy.
The mining sector is the biggest contributor to export earnings. Its contribution to total exports increased from an average of 48% from 2009 to 2013 and increased to an average of about 53% from 2014 to 2018, with major exports being gold, diamonds, Platinum-Group Metals (PGMs), among other minerals. Gold also contributes about 40% of total mining exports, as such, the gold sector is viewed as the financial lifeline for the country.
Mining companies are beneficial to the economic growth of the nation as they can contribute to development in their communities of operation like construction of public infrastructure like roads, schools, hospitals and provide water. For instance, Zimplats which 7 months ago channelled more than $43 million to indigenous business entities mostly based in Mashonaland West. Zimplats has also helped to set up the Mhondoro – Ngezi - Chegutu Community Share Ownership Trust.
The mining sector has set its target to generate an annual revenue of more than $12 billion by year 2023. This is set to contribute immensely towards the country’s attainment of an upper middle income economy status by 2030.
Thus, the new dispensation is on the right track in terms of achieving its economic vision by supporting the mining industry in any way possible.
