Mining revenues top $1 billion

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The mining sector produced minerals worth $1 billion in the first seven months of the year driven by revenues from gold, platinum and palladium, figures from the Chamber of Mines of Zimbabwe (CMZ) have shown.

The three minerals combined contributed $731 million to the total.

Minerals included in the statistics are coal, cobalt, ruthenium, palladium, graphite, phosphate, high carbon ferrochrome and quartz.

According to the statistics gold earned $316 million from 6 736kg in the seven months under review while platinum raked in $310 million from 6 177kg.

At least 13 000kg of gold are expected this year and 12 000kg of platinum are also expected.

Paladium earned $105,8 million from 4 820kg while nickel earned $92,8 million from 4 492kg in the period under review.

Chrome output was 347kg and a total of $42 million was raised while rhodium was at 544kg in terms of output, raising $33,8 million in the seven months period.

Ruthenium raised $1,8 million from a total output of 483kg.

A total output 1 615kg of graphite was sold for $753 413.

The output for the mining sector has been on an uprd trend since the beginning of the year although the country did not produce any asbestos and black granite during the seven-month period.

The mining sector is expected to record a 44% growth this year. African countries, including Zimbabwe, have been challenged to broaden their economic base and not remain so dependent on commodity exports for its growth.

Finance ministers from the continent speaking at a recent IMF-World Bank meeting noted that diversification into more labour-intensive industry would make Africa’s growth less volatile and more inclusive.

Finance minister Tendai Biti in his MidTerm Fiscal Policy Review said the mining sector’s growth was not translating to increased revenue to the fiscus nor increased benefit to the economy.

“First are the challenges of the industry associated with an over-accommodating tax structure. Second is the virtual absence of beneficiation and value addition in the economy.

Third is an obscure legal regime codified in the current Mines and Minerals Act,” Biti said.

According to the recently launched Medium-Term Plan (MTP) 2011 to 2015, the mining sector has the capacity to sustain double-digit growth, but continued to face numerous challenges.

“Shortage of funds for recapitalisation and working capital finance remains a huge challenge facing the sector.

“As a capital-intensive sector, mines are grappling with securing reliable sources of long-term capital to finance their operations,” read part of the MTP document.