Zimbabwe’s mining sector could achieve significant growth during the period 2016 to 2020, driven by increased platinum and diamond production, the US-based International Business Monitor (IBM) has said.

But it hastens to add that political uncertainty, a challenging regulatory environment and falling mineral commodity prices could put paid to the envisaged growth.

Zimbabwe is richly endowed with chrome, gold, nickel, diamonds and platinum, besides other minerals. Its gold reserves are besides the big- gest in Africa, while it has the
world’s second- largest platinum reserves, after South Africa. Its diamond reserves are to be the second- largest globally, after Russia.

Developments in these key markets, together with the political and economic climate becoming more stable gradually, have seen the country’s status as a major global producer strengthen in recent years. In terms of overall output, Zimbabwe is also a significant platinum producer, while a recent reduction in taxes for smaller gold miners is expected to lead to significant increase in production this year.

The report notes, however, that the sector faces challenges such as political and economic risk factors, which will likely directly impact on the regulatory and investment environment.

“The changing regulatory environment surrounding Zimbabwe’s diamond mining industry is likely to create challenges as well as opportunities for diamond production over the next few years. In terms of the challenges, on February 22, 2016, the Zimbabwe government ordered all diamond mining firms in the Marange diamond fields to halt operations and vacate their premises within 90 days, stating that their licences and special grants had expired,” the IBM report states.

The IBM says that, despite the many problems it faces, Zimbabwe is poised to become a major diamond producer in the next four years, on the back of new investments by established and new players seeking to capitalise on the second- largest diamond reserve in the world.

The envisaged rise of Zimbabwe as a major diamond producer contrasts with slowing production growth in neighbouring South Africa, where, IBM predicts, growth during the next four years will be weighed down by persistent labour unrest and high energy costs.

IBM also predicts that Zimbabwe will remain a minor gold producer in Africa, way behind South Africa, Ghana and the Democratic Republic of Congo, owing to its overreliance on output from artisanal miners and small-scale producers.