GOVERNMENT says the mining industry will this year fail to realise the projected annual turnover of over $2 billion due to depressed commodity prices.
BY MTHANDAZO NYONI
Instead, annual turnover would be under $2 billion, Mines and Mining Development deputy minister Fred Moyo told NewsDay on the sidelines of the mechanisation for industrialisation conference in Bulawayo yesterday.
“Mining industry at the moment is depressed. All minerals are depressed because of commodity prices but we believe that at the moment, as long as they all at least break even and stay in business and as we try to recapitalise and give efficiencies so that they can be able to carry the reduced commodity prices, then we can be happy,” Moyo said.
The mechanisation for industrialisation conference was held at the ongoing Zimbabwe International Trade Fair. Moyo said it was not all gloomy as other minerals were doing fairly good.
“There are some which are doing well. I think gold is doing very well at the moment if we are going to support it particularly the small-scale side. So we are not too disappointed. Yes, we have projected just under $2 billion away from above $2 billion of an annual turnover that we had planned for. But the sector is alive and we just have to try and keep it there,” he said.
The mining industry, estimated to require up to $5 billion in fresh capital, has over the years failed to access funding for recapitalisation and new projects.
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According to the Zimbabwe Chamber of Mines, the mining sector continued to operate below capacity as it faces several challenges, which include depressed metal prices, low capital and foreign direct investment inflows, high cost structures, sub-optimal royalties and power shortages.
Analysts warned government needed to pay more attention to the welfare of the mining sector to save it from total collapse.
The mining sector was the backbone of the economy since 2009 when the country introduced the multi-currency system. In 2009, the sector recorded a total turnover of $671,5 million from all minerals, growing to $1,4 billion in 2010. In 2011, the total value stood at $2 billion before going down to $1,9 billion in 2012.
In 2013, the total value of mineral sales was $1,97 billion and the sector contributed about 65,2% of export earnings.
