Stop paying lip service to beneficiation

STAKEHOLDERS in the extractive sector have, since time immemorial, been calling on the government to beneficiate the country’s minerals resources for maximum returns, but the message seems to be falling on deaf ears, as not much investment has been made on that front.

As a result, the country continues to lose out on its precious resources which are being sold on the cheap, as they are sold in their raw form.

We believe that with this kind of approach to economic fundamentals, the so-called rapid economic turn-around, which President Emmerson Mnangagwa’s regime envisages, will remain a pipe dream.
It’s time the government stops paying lip service to beneficiation and take giant steps towards investing in machinery, expertise and creating a conducive environment required to add value to our mineral resources before showcasing them on the international market.

Merely calling on extraction companies to beneficiate without addressing fundamental infrastructural issues is not only deceptive, but will impact on growth and development.

The high cost of power remains one of the major bottlenecks to beneficiation, and has been blamed for pushing many companies out of business as they fail to service their debts.

Recently, leading chrome producer/smelter Zimasco was about to go under owing to a huge electricity bill, which had risen to $15 million, making it almost unprofitable to smelt chrome in the country.

Sable Chemicals, the country’s sole manufacturer of ammonium nitrate fertiliser, also recently shut down its electrolysis plant, shedding off more than 300 jobs to reduce its electricity bill, which had become unsustainable.

The company owed power utility Zesa Holdings $30 million and has now resorted to importing ammonia from South Africa instead of manufacturing it at its Kwekwe plant.

Stakeholders attending the just-ended mining indaba in South Africa raised concerns over Zimbabwe’s delays in creating a conducive environment for beneficiation.

Mnangagwa and his team can ill afford to ignore such calls if, indeed, they have any hope of jumpstarting the economy using locally available resources.

The government has a role to play to ensure that the cost of doing business is competitive and, therefore, making it profitable to beneficiate raw materials in Zimbabwe as opposed to importing finished products.

Zesa is currently selling power at 6,83 cents per kilowatt hour (kWh), at a time chrome producers say for them to break even, they need to buy power at 3 cents per kWh.

Currently, the steel industry is also crying foul over cheap steel imports from Zambia and South Africa, which are flooding the market, making it cheaper for imports than manufacturing.

So, it’s clear that as long as the fundamentals remain steeped in favour of imports, our mineral resources will not benefit us as a nation.

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