Mining booms as commodity prices rally

The Chamber of Mines of Zimbabwe says 2010 was a bullish year for the country’s resources sector as all leading minerals except asbestos and coal reported a systematic ramp-up, buoyed by firming global commodity prices, which are expected to sustain the rally through this year.

The miners’ body, which represents the interests of large-scale mining houses, reviewed the industry’s performance based on production figures for the first eleven months of last year, except coal for which data is only available up to September.

According to the statistics, platinum accounted for the bulk of the sales, receipting $370,5 million by
November from $34,8 million in the first quarter. Total shipments for the period reached 7 876,69 kilogrammes.

Gold ranked second best revenue performer, earning $336 million from the sale of 634 kilogrammes, followed by high carbon ferrochrome, which turned in $119 million from 136 820 kilogrammes.

Although the country’s sole primary producer of nickel — Bindura Nickel Corporation — is still on care and maintenance, the precious metal accounted for the fourth largest revenue contribution, grossing $100,5 million out of the 5 610,77 tonnes produced.

The commodity is part of the family of the platinum group metals (PGMs). Zimplats is the largest secondary producer of nickel followed by Mimosa Mining Company.

During the period, total mineral sales by the members of the miners’ body reached $1,2 billion.

Chamber of Mines chief economist David Matyanga said firm global commodity prices was the key driver of Zimbabwe’s mining performance as it incentivised miners to recapitalise and ramp up.

“International prices were firmer during the year (and boosted production),” Matyanga said.

“The stability brought by the use of multiple currencies in the conduct of business improved producer-supplier relations and contributed to the good performance of the minerals.”

Matyanga said asbestos and coal were the least performers.

Asbestos production declined by 55% this year compared to last year as ownership and working capital problems stalked Shabanie and Mashava mines. The two mines closed down during the course of the year after producing 2 030,97 tonnes.

Coal production is estimated to have declined by 29% compared to 2009 as a result of operational challenges at Hwange Colliery Company, the country’s largest producer of the fossil fuel.

“The mines for coal and asbestos faced working capital constraints,” said Matyanga.

“The case of asbestos is mainly a shareholder issue affecting ability to recapitalise and run the business.”
Matyanga said chromium output was 164% higher than 2009 while high carbon ferrochrome rose by 107%, followed by gold 90%, nickel 26% and PGMs (25% for platinum, 34% for ruthenium, 28% for palladium).

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