Diversified consulting engineer SRK Consulting has taken advantage of the current rejuvenation of the mining industry in Zimbabwe to set up a fully functional office in the country, similar to the recently established office in the Democratic Republic of Congo (DRC).

This forms part of SRK’s aggressive African expansion strategy, which has seen the company establish two African offices in a space of four months.

SRK followed the same strategy in Zim- babwe that it adopted when establishing its DRC office. This saw the company acquiring the services of an experienced professional, who has working experience in the country that SRK is expanding into.

SRK chairperson Roger Dixon reports that this is vital, as the professional will already have established a ground network to generate business. This person will also have a working knowledge of both the political requirements for working in the country and of its government offices.

On the Rise
A lot has been reported about the deplorable state of Zimbabwe and its beleaguered mining industry. At the height of the country’s financial crisis, which saw inflation rise above 10 000%, international mining companies continued a mass exodus, mothballing projects that were deemed uneconomical and posing a significant financial risk.

However, newly appointed SRK Zimbabwe country manager Arimon Ngilazi says that, since the government reached a measure of financial stability where inflation is “relatively” contained, there are visible green shoots of rejuvenation within the mining industry.

“Since the 2009 Zimbabwe Mining Indaba, the country has seen a significant uptake in the industry, with mining companies that previously had a presence in Zimbabwe looking to re-establish that presence. However, there is a significant skills and expertise gap in Zimbabwe. This opens an opportunity for SRK to take advantage and help fill that gap,” says Ngilazi.

Ngilazi has been working closely with Dixon and SRK partner Victor Simposya to identify potential target projects that the company can approach to offer its services.

“SRK is currently working on the Ngezi platinum project, which is owned by plati- num major Zimplats, as well as on a coal project, in Zimbabwe’s coal-rich southern region. However, SRK’s involvement is not limited to these projects. Over the coming months, the company will be involved in four gold projects as well as continuing its work on a copper project,” says Ngilazi.

SRK established its DRC office in Lubumbashi in May and Simposya reports that the company learned a lot of valu- able lessons from the establishment of this office, that could be applied in Zimbabwe.

The establishment of the DRC office was the first time that SRK used the model of empowering locals that would eventually feel that they formed a significant part of the company’s merging of local ownership and equity through participation.

He notes that the establishment of the Zimbabwe office has been a lot easier than the establishment of the DRC office because the language barrier is not a challenge.

Looking ahead, Ngilazi says that one of the major challenges in Zimbabwe will be the limited access to power infrastructure. At the 2009 Zimbabwe Indaba, this concern was highlighted as a major stumbling block for investors hoping to return to the country.

It was pointed out that, currently, the available electricity generation capacity in Zimbabwe is only 1 000 MW, compared with an installed capacity of 1 890 MW. The available capacity is still significantly less than peak demand, which currently stands at 1 600 MW.

However, Zimbabwe President Robert Mugabe says this challenge will soon be resolved.

“Several power projects requiring new investors are pending. This will include Hwange power stations 7 and 8, as well as new power stations at Kariba and Batoka. In addition, government will institute the necessary energy sector reforms required for attracting new investment in that sector,” says Mugabe, speaking at the Indaba.

Moving into Africa
Commenting on the next steps in the company’s African expansion, Dixon says that the company will be very active in the coming months.

“Once the company fully establishes itself in Zimbabwe, which could take a few months, it can concentrate on establishing its Ghana office. SRK has already identified John Kwofie for the position of Ghana country manager and the office will most likely be up and running by the end of October,” says Dixon.

He notes that the company will, again, follow the same model for the Ghana office as it did for the DRC and Zimbabwe offices, where it will merge local equity ownership through participation.

Like Zimbabwe and the DRC, Ghana offers an exciting opportunity for SRK.

“The mining industry in Ghana is one of the oldest mining industries in the world, which dates back to the ancient Mandinka empire. Mining in the region has continued to be a significant industry since then, with significant gold deposits existing in Mali and Guinea. In addition to the country’s gold deposits, Ghana is set to become an oil producer by the end of 2010,” concludes Dixon.

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