Falling commodity prices will slowdown Zimbabwe’s resource-driven economy, the Chamber of Mines of Zimbabwe (CoMZ) has said.
CoMZ chief executive officer Isaac Kwesu said on Tuesday the falling commodity prices and rising production costs were threatening the viability of the sector with a number of companies failing to break even.
“Our industry is going through difficult times specifically against the backdrop of depressed prices. The majority of mining houses are struggling to break even and prices remains one of the biggest hindrance. Viability may have been compromised as the cost of production has not been coming down. Instead the costs have been going up,” Kwesu said.
He said the industry was going through difficult times and has been recording negative growth in the past two years.
Kwesu said despite the setbacks some minerals like gold and platinum have performed well.
“Notwithstanding the negative projections, despite the prices, there are some minerals which have been performing well. These key minerals gold and platinum constitute 50% to the mining sector and we hope the sector will be on an upward trend,” he said.
he said the Chamber would today announce the results of a survey on the state of the sector.
Last year, CoMZ commissioned Nu Times Innovation to do a state of the Mining Industry survey.
The survey is the first of its kind and would be refined and improved in subsequent years.
In his 2016 National Budget statement, Finance minister Patrick Chinamasa said the mining sector was expected to rebound this year growing by 2,4%, on the back of planned investments, and largely driven by strong performance of gold, chrome, coal, nickel, platinum and diamonds.
Chinamasa said commodity prices were projected to rebound marginally this year after large plunges in 2015 “with the exception of such commodities as gold and crude oil, whose prices are projected to continue on a decline”.