Zimbabwe’s mining sector recorded a marginal increase in first-quarter export earnings on the back of production improvements in the coal, nickel and gold subsectors. The platinum and chrome subsectors, however, recorded sharp declines owing to high power tariffs, lower prices and high royalty charges.
In his latest sectorwide report, Chamber of Mines of Zimbabwe (CMZ) CEO Isaac Kwesu says earnings for the first three months of 2015 totalled $452-million, compared with $443-million for the corresponding period last year.
He says coal production increased by 55%, while nickel and gold production increased by 5% and 2.5% respectively.
He says the bulk of the gold that accounted for the increase in production was supplied by small-scale miners, as the major gold mining houses continue to be constrained by the liquidity crisis in the country, high power costs and heavy royalties.
While the coal, nickel and gold subsectors reported increases in production, output in the chrome sector slumped by 45%. The platinum-group metals’ subsector reported a 1% drop in production for the third consecutive quarter.
“The major factor in the chrome subsector is the cost structure, with plus or minus 50% of costs related to electricity consumption. The electricity tariffs are a major contributor to the cost structure. Players are, therefore, proposing a reduction in tariffs to $0.08/kWh from the
current $0.13/kWh,” says Kwesu.
The chamber projects that the overall mining sector will grow by 3.1% this year, with gold expected to lead the growth, after registering a 25% increase in first-quarter deliveries. Gold deliveries for this year are on the rebound, after recording a 2.1% drop in the third quarter of 2014.
High power costs and royalties were some of the issues discussed at its seventy-sixth annual general meeting (AGM) of the chamber, held in the resort town of Victoria Falls towards the end of last month under the theme ‘Shared Vision, Shared Values, Shared Benefits: A roadmap for the Zimbabwe minerals sector’.
Zimbabwe Vice President Emmerson Mnangagwa was the guest of honour at the AGM, which was also attended by representatives from
the World Bank, the United Nations Economic Commission for Africa and the Mining Industry Association of Southern Africa.