The Mines and Mining Development ministry is considering introducing incentives to encourage beneficiation of minerals in selected sectors of the economy as a way to ensure the country gets more from its resources.
Mines minister Obert Mpofu, in a strategic overview of the mining sector at the Chamber of Mines meeting last week, said possible areas that could be incentivised included diamond cutting and polishing, platinum refining, lithium processing and manufacture of lithium batteries and the processing of dimension stones.
“Taking cognisance of the fact that mineral beneficiation plays a critical role towards the sustainable development of the mining sector and the economy in general, my ministry proposes to come up with incentive schemes to encourage investment in mineral beneficiation and value addition,” said Mpofu.
“Maximisation of export of appropriately beneficiated and value-added minerals and related products will further boost liquidity through enhanced earnings thereby significantly contributing to economic development.”
Mpofu said the country continued to face serious liquidity challenges at a time when huge financial resources were banked offshore.
“We encourage the Ministry of Finance to find ways of persuading all banks to comply with the directive to bring 75% of their funds onshore.
“Channeling of these funds to productive sectors of the economy will help boost liquidity, turning around of the economy and mending the local operating environment necessary for medium and long-term productivity,” he said.
In 2010 mineral exports grew by 138% generating $1,68 billion while last year they grew by 38,7% to $2,6 billion. This year mineral exports are projected to record a further growth of 13,3%.
Diamonds are anticipated to play a more significant role going forward. At least $600 million is expected from diamond revenues alone.
Mpofu, however, said despite huge and diversified mineral endowment, these have remained under-explored.
He said the country was lagging behind in the use of latest technologies in conducting exploration, mining and mineral recovery.
“This stems from lack of appropriate investment in the entire value chain of the sector. There is need to continuously and timeously upgrade our mineral resources into mineral reserves in appropriate standards and formulate bankable projects so as to attract serious and capable investors,” he added.