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Mining sector sets base for growth and development – The Herald

The Herald
Nelson Gahadza Senior Business Reporter
The year 2022 will not go without mentioning the various mining sector projects worth billions of United States dollars that were commissioned, setting the base for the industry’s growth in 2023 and beyond.
For 2022, the Government has forecast the mining industry’s annual growth in production at 8 percent. Optimism for this year in the sector remains encouraged by ongoing developments to increase capacity, and outlook on commodity prices.
This year alone, projects worth over US$10 billion have been commissioned within the platinum, gold and lithium sectors with some targeting commercial production early next year.
These projects will accelerate the Government’s ambitious plan to transform the mining sector into a US$12 billion export industry by the end of 2023 and create new employment.
The plan was launched in October 2019 as a key pillar to sustainable economic growth and achieving that target would represent a 275 percent jump from the US$3,2 billion realised through exporting mining commodities in 2018.
Key to the plan is the beneficiation of minerals at source as opposed to exporting raw mining commodities.
The country has a massive competitive advantage in the mining sector with a highly diversified mineral resource base of over 40 commercially exploitable minerals.
President Mnangagwa earlier in the year commissioned the Eureka Mine mining project where he indicated that an investor, Dallaglio Investment, had poured in US$60 million to capitalise the mine which will create employment in Guruve.
President Mnangagwa also commissioned the Blanket Gold Mine Central Shaft Expansion where he challenged mining houses to increase investments in their operations for the realisation of maximum value from our mineral resources.
Blanket Gold Mine is located approximately 15km west of Gwanda. The mine began production in 1904 and was acquired by Caledonia Mining from Kinross Gold in 2006. It currently produces approximately 1,200t of ore a day.
Last week, the President presided over the groundbreaking ceremony for a new US$130 million Sabi Star lithium mine in Buhera District, Manicaland Province.
Zimbabwe is believed to have the largest lithium reserves in Africa and the fifth-largest deposits worldwide and lithium mining in the country is on the rise with several projects in the exploration phase forecasted to start production in 2023.
The mineral is in high demand as an essential raw material for the lithium-ion batteries that power electric vehicles, as more countries move to cut their carbon footprint.
Production at Sabi Star mine is anticipated to start in 2023 at a rate of 3000T/day. An exploration fund of US$20-50 million has been set up to grow the Sabi Star resource through acquisition of additional ground and continued exploration that will expand the life of the mine.
According to Mines and Mining Development Minister Winston Chitando, Zimbabwe’s upcoming platinum projects and upgrades from existing platinum mines will position the country as a global platinum powerhouse.
The World Platinum Investment Council (WPIC)   considers Zimbabwe to have the world’s second-largest platinum group metals (PGM) resource, after South Africa, on the Great Dyke.
Within the platinum sector, the Karo Resources, which signed a $4,2 billion platinum deal with the Zimbabwe government in 2018 and has since commenced operations, targeting first production by July 2024 will become the fourth platinum producer in Zimbabwe while others such as Bravura Mining Consortium, Todal Mining Limited and the Great Dyke Investments (GDI) are also on target for platinum production.
Minister Chitando said Zimbabwe’s platinum production is poised to become a formidable force in the world where you can no longer talk about platinum production without mentioning Zimbabwe.
He said the existing three players, Mimosa, Unki and Zimplats are expanding. In terms of beneficiation, the Minister said the three platinum producers commissioned a study to investigate the possibility of putting up a base metal refinery from a technical and financial aspect.
He said the results of the study were released to the government last year and it indicated that there was now sufficient throughput available to put in a base metal refinery.
Zimplats Holdings, which is presently Zimbabwe’s largest platinum producer, this year approved an overall capital investment strategy for the group with a budget of US$1,8 billion to be implemented over a 10-year period.
According to Mr Alex Mhembere, the major capital expenditure projects are part of the group’s investment strategy which began in 2021, with US$1,2 billion already approved for implementation.
“These projects, including those that are currently in process of being approved, will concentrate on maintaining current production levels through mine replacements and upgrades at a cost of US$516 million,” he said.
Mr Mhembere added that the strategy is also targeted at expanding production levels through growth projects, including the development of a new mine and increased processing capacity, which will boost nameplate capacity from 6,7 million tonnes per annum to 8,8 million tonnes per annum.
The country’s mining industry representative body, the Chamber of Mines in its recent report said the mining industry continues to be an important sector in the Zimbabwean economy, and the Government’s economic blueprint, the National Development Strategy 1 (NDS1), accords the mining industry a central and important role.
The Chamber’s president Mr Collins Chibafa said the mining industry contributes 73 percent to foreign direct investment, 83 percent to exports, 19 percent to government revenues, 2 percent to direct formal employment, and 11 percent national income (DGP and GNI).
He said these levels of contribution are on the upper end of the contribution ranges for Middle Income and Lower Income economies and the Zimbabwean mining industry’s contribution to the economy is generally higher than the average for Sub-Saharan countries with significant mining activities.
Economist Dr Prosper Chitambara said the country will need to continuously enhance the processing capacity for different minerals to preserve as much value within the economy.
The artisanal and small-scale miners (ASM) are also expected to play an important role towards the US$12 billion mining milestone with sector player’s committing to contribute US$4 billion by the targeted period.
In the diamond sector, as part of a broader expansion program, RioZim Murowa, a subsidiary of RioZim, has announced that it intends to commission a processing plant at its Murowa diamond mine, located in Mazvihwa, south-central Zimbabwe that is expected to double its production capacity.
The firm has stated that the project is expected to increase its output from 190,000 tonnes of ore per month to 500,000 tonnes and will see operations transition from open cut to underground mining.
The commissioning follows the announcement in April this year that RioZim Murowa intends to invest over US$450 million into the expansion of its Midlands province operations, with the current phase of the expansion program expected to cost US$62 million, extending operations at the Murowa mine by four years.
According to the Chamber of Mines Zimbabwe, mining companies are expected to create over 4 000 new jobs in 2023 on the back of US$1 billion capital expenditure programs in the sector.
The projected growth represents a 9 percent increase in new formal employment from the nearly 45 000 workers employed in the sector presently.
 
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