The Zimbabwe Economic Analysis and Research Unit (Zeparu) says the country’s yearly mineral revenue earnings are likely to rise from $2.6-billion this year to $24-billion by 2018, but this will depend on the implementation of several mining projects and on whether the country adopts investor-friendly policies.

In a new report entitled ‘Mining Policy Study’, Zeparu says that, given enabling conditions, fiscal revenues from mining will rise to $6-billion a year from $310-million at present and that 21 000 new jobs will be created in the mining sector by 2018.

“The optimistic case estimates that, by 2018, mineral revenues could be over $11-bil-lion, fiscal revenues over $1.5-billion and employment could be over 56 000. However, these projections exclude major expansions of iron-ore and coal operations and the reactivation of asbestos and copper mining.

“If the development of an iron-ore export corridor for the huge Mwanesi iron-ore resources goes ahead, with expanded iron/steel exports, and a heavy-haul coal exports rail link to Mozambique is established, then the gross revenue could be more than $24-billion and fiscal revenue over $3-billion, [if the resource rent tax (RRT) is not reintroduced,” the report reads.

It adds: “The World Bank . . . predicts that, by 2018, mineral revenues could be nearly $5-billion. However, this excludes the reactivation of iron-ore mining . . . and asbestos mining. In the best case, most of the expansion will be due to the reactivation of gold operations, the recapitalisation of Hwange Colliery Com-pany, the reopening of the [Bindura] nickel mine and increasing diamond production at the Marange diamond fields, in east of the country.”

Further, the report predicts that the sector could generate fiscal revenues of up to $6-bil- lion a year by 2018 if government reintroduces the RRT on mining claims.

The report’s findings are supported by a recent World Bank assessment of economic recovery prospects in Zimbabwe, which projected that yearly diamond output will rise from the current 12-milion carats to between 25-million carats and 34-million carats in the next few years.

According to government and Chamber of Mines data, the mining sector needs up to $5-billion to increase productive capacity to an average of 80% in the next three to five years.

Investment is also required to upgrade infrastructure and to provide adeqaute power, transport and water to support the growth of the sector.

A new report compiled by Ernst & Young (E&Y) warns that a lack of access to capital has emerged as the biggest threat to the devel-opment of the mining sector in Zimbabwe. The report notes that inadequate access to capital has overtaken concerns over legislation and the business operating environment as the main challenge confronting the industry.

“Capital allocation and access to capital have rocketed to the top of the business risk list for mining and metals companies, from number eight in 2012. “This threatens the long-term growth pros-pects of the larger miners and the short-term survival of the cash-strapped smaller miners,” says E&Y mining and metals sector leader for Zimbabwe Nqaba Mkwananzi.