- Oct 15, 2018
- Posted in News
The Zimbabwe mining landscape has been one of the most endowed in terms of the value of minerals but to date the country has continued to wallow in subject poverty, where the majority has failed to fully benefit.
The question has continued to be asked “why?”
The availability of aging and outdated equipment has proven to be an albatross hanging around most local mining
companies, where in some notable mining houses they are still boasting of equipment as old as 50 years yet the
mining world had drastically changed. There has been a massive shift with regards to technology and latest equipment in mining but Zimbabwe has been lagging behind on that front.
The Southern African country’s mines require about $11 billion to revamp equipment for better efficiency in order to increase the sector’s contribution to gross domestic product
Zimbabwe has failed to fully feel the gains from the mining sector as extraction methods being employed by some companies have proven to be ineffective, ineffective and cumbersome. It is quite surprising that to date only about three companies are using the latest technology in mining.
At the moment only Zimplats, Unki, Mimosa and partly Caledonia are the flagships in terms of using the latest technology but looking at our neighboring South Africa, latest mining equipment and technology has made a massive difference in terms of how the 21st mining is conducted.
There have been repeated calls from Government and together with mines representative bodies that mine needs to mechanise with the latest equipment but the issue of funding availability has proven to be an elephant in the room.
The situation has further been exacerbated the continue acute shortages of foreign currency on the
financial market where most firms have since resorted to black market.
To further worsen the situation has been the skyrocketing of exchange rates of the RTGS to the United States Dollar which has since hit 100 percent mark. This has become a toll order for most companies to retool while big firms have not been facing such situations since they already export.
Metallon Gold Corporation chairman Mzi Khumalo joined the bandwagon by noting the need to mechanise and coming up with the latest mining technology in the Zimbabwe mining landscape and the setting up a Sands Retreatment Plant in Mazowe by the mining group bears testimony to his utterances.
“We have a programme in place aimed at mechanizing our mines and bringing in new technology,” said Khumalo recently.
Chamber of Mines Zimbabwe president Batirai Manhando this year noted the need for mines to invest heavily towards recapitalisation and re-equipping their operations to improve operational efficiencies.
Manhando said the machinery at most mines are over than 50 years old—making them less productive and effective against developments.
Gold, nickel, cobalt and coal miners among others are all operating below their installed capacity with only one
“The local mining industry is currently operating below capacity on the back of capital shortages. At the beginning of the year the capital-intensive industry required $7 billion for both ramp-up and sustenance capital. The figure has lately been revised upwards to $11 billion with renewed interest in our sector,” Manhando said recently.
The mining sector has over the last few years emerged as one of the strongest pillars on which economic recovery will lean and in this regard Government has been commended for its efforts to facilitate resumption to full
production by big mining firms as enunciated by President Emmerson Mnangagwa.
Zimbabwe boasts at least 40 minerals, with the Great Dyke being home to some of the richest mineral deposits on the continent. This country is renowned globally for its platinum resources, diamond and gold deposits, chrome and other such minerals that have potential to transform this country into the Switzerland of Africa but efficient mineral exploitation has been compromised by inadequate capital, machinery and the export of unprocessed raw minerals
instead of the finished product.
For years the country has boasted of what is in its belly in terms of mineral deposits but has not had the wherewithal to exploit these to improve the economy. Zimbabwe breaks world records and in some instances comes second only to South Africa in terms of mineral deposits but output figures have not been that encouraging.
Most mining operations suffer from undercapitalisation and are, therefore, in need of re-capitalisation through financial injections. Most mines are currently operating slightly above 50 percent of their designed capacities due to lack of finances for recapitalisation.
Most mining operations suffer from undercapitalisation and are, therefore, in need of recapitalisation through financial injections. Most mines are currently operating slightly above 50 percent of their designed capacities due to lack of finances for recapitalisation.
Mining equipment supplier Graeme Loxton told Mining Zimbabwe that there has been a growing appetite by mining companies to purchase new equipment but the challenge has been around the availability of foreign exchange. He said the biggest hit in terms of failure to purchase latest equipment have been smaller mining companies that are not yet exporting their products. A perfect example is the guys doing lumpy chrome and selling locally.
“There is business in as far as purchase of mining equipment is concerned but the only hindrance has been around the availability of a guarantee and availability of foreign currency because looking at the current situation you would see that equipment like a 25-30 tone excavator is going for approximately $173 000 and to raise that in foreign exchange terms and the rates obtaining on the local market its quite a challenge,” said Loxton.
Zimbabwe has a diverse and well-developed mineral sector, which is steadily recovering from an economic low and has immense potential to anchor inclusive economic growth and development. The mining sector has been
identified in the economic blueprint, the Zimbabwe Agenda for Socio-Economic Transformation (ZimAsset), as one of the engines for growth and transformation of the economy alongside the agriculture sector.