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Indaba focuses on redefining Africa

6th September 2013

By: Chantelle Kotze

  

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Zimbabwe’s mining sector has shown a slow, yet significant, recovery over the past five years, with an overall upward trend in mineral production, says corporate and project finance advisory and consulting firm Utho Capital, organiser of the yearly Zimbabwe Mining and Infrastructure Indaba.

“Zimbabwe’s mining sector has continued to lead in export earnings for the country, rising to $2-billion in 2012, from $1.8-billion in 2011. The major drivers of the growth included diamonds, platinum and gold. This year does not seem to be any different, assuming the current momentum is maintained,” says Utho Capital CEO Sheila Galloway.

The sector also continued to lead economic performance, contributing an estimated 16% to gross domestic product in 2012, up from 13% in 2011.

Militating against higher growth rates, however, is the unavailability of medium- to long-term credit facilities for working capital and recapitalisation requirements, as well as perennial power shortages owing to deteriorating energy infrastructure.

Other challenges facing the Zimbabwe mining industry include the adoption and implementation of indigenisation legislation and regulations; upgrading infrastructure such as rail and roads; instituting mining legislation, polices and strategies that are transparent and certain; attracting funding and finance; as well as managing the negative perceptions that have pervaded Zimbabwe.

“These enablers – if they remain unresolved – will continue to be major impediments to potential growth targets that Zimbabwe’s natural resource potential presents,” highlights Galloway.

Despite its challenges with regard to policy and the perceptions of potential investors, Zimbabwe maintains an extensive mineral value proposition, owing to its extensive mineral resource base, which includes more than 60 different minerals.

Further, the orebodies are generally present at shallower depths than comparable ore-bodies in neighbouring South Africa, lending themselves to relatively lower operating costs.

The potential for growth in Zimbabwe lies in mining, beneficiation and establishing a commodity trading exchange, she notes.

To ensure that the country bolsters the benefits of its mineral resources in terms of value, the creation of employment and a manufacturing base, skills and technology transfer, as well as sustainable economic development, the mining industry needs to promote local beneficiation and value addition, Galloway says.

Meanwhile, the government of Zimbabwe is developing a minerals policy that aims to, among others, address the challenges affecting the sector and explore ways of attracting investment to the sector.

She says the development of a minerals policy is critical, particularly when the increasing role of the mining sector in supporting the socioeconomic growth aims of government, job creation, revenue and export earnings is taken into consideraton.

The draft policy proposes to establish an internationally competitive, stable and conducive business climate to attract and sustain foreign and local investment, while ensuring the equitable distribution of benefits from mining activities to meet current and future needs.

It further proposes an overhauling of the country’s Mines and Minerals Act and the introduction of new minerals development legislation that will see the development of mineral assets having a positive impact on growth and development.

She further maintains that to ensure a prosperous future for the mining sector, the Zimbabwe government must develop policy initiatives and reforms that provide win-win solutions for the investor and the people of Zimbabwe.

“The Zimbabwe government has a duty and obligation to create a conducive and enabling economic environment and business climate – particularly one that is certain, predictable, respects the rule of law and provides an enabling policy framework that encourages and facilitates sustainable mining activities, including beneficiation,” notes Galloway.

As a means of highlighting and improving the state of Zimbabwe’s mining industry, Utho Capital will continue to market Zimbabwe internationally by once again facilitating the yearly Zimbabwe Mining and Infrastructure Indaba.

Galloway says that the positive interaction that has taken place between government and stakeholders at previous indabas has helped to overcome differences in the views of government and the private sector regarding the mining policies and regulations in Zimbabwe.

Collective Effort
The theme of the Zimbabwe Mining and Infrastructure Indaba 2013, which runs from September 25 to 27 at the Harare International Conference Centre, is Redefining Africa: Harnessing our Resources Collectively.

Globalisation and economic pressures have created a new imperative for African countries to start working together, as regional and continental integration is the only viable framework that will lead to a peaceful, stable, prosperous and democratic continent in the current globalised environment.

“The indaba’s goal is to harness the fundamental areas of mining, financial and human resource requirements to ensure sustainability and prosperity on the continent to move development and economies into the future. This will start the process of redefining Africa as a continent of abundance and wealth,” says Galloway.

The aim of this year’s event is to stimulate discussions and influence decisions, activities, legislation, regulation and policies that will improve the lives of all persons living in Africa to uplift the continent in terms of economic development and growth.

“Without the continuous dialogue among African countries, as encouraged at the indaba, each country will operate in a silo and Africa will neither attract the requisite funding required to implement major infrastructure projects that benefit the relevant economic blocs and the continent, nor will the continent negotiate mining deals from a position of strength,” notes Galloway.

The event, therefore, focuses on evaluating and overcoming the failures and challenges in Africa because she maintains that only through robust self-criticism and introspection can appropriate lessons of history be learnt and corrected, and economic prosperity be achieved as a result of taking appropriate corrective action.

The Zimbabwe Mining and Infrastructure Indaba 2013 will have a regional focus and will showcase a panel comprising prominent speakers and stakeholders from the Southern African Development Community and the rest of Africa to discuss key issues that impact on the mining sector in Africa, particularly infrastructure development and funding.

Some of the topics and issues that will be addressed include creating a conducive environment for mining in Africa; building sustainable communities through mining; the new generation of miners in Africa, which includes women, junior miners and artisanal miners; the European Union’s support for the mining sector and its focus on the issues of transparency and governance; regional integration of infrastructure; and Africa’s power and energy projects.

Speakers will include Chamber of Mines of Zimbabwe president Alex Mhembe, Standard Bank Africa strategist Yvette Babb, World Bank senior economist Nadia Piffaretti, Deloitte UK Mining Consulting Practice head John Woods, Norton Rose director and Africa Loan Market Association chairperson Steven Gamble, Scanlen & Holderness Legal Practitioners senior partner and chairperson Sternford Moyo, and Webber Wentzel Africa mining and energy projects team partner Thabang Masingi.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

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