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'Focus still on US$12bn mining sector by 2023'

Polite Kambamura

ZIMBABWE'S mining industry remains resilient in the short to medium term, despite the negative impact of Covid-19-induced setbacks on existing and planned investments. The country is targeting to grow export revenue from minerals to US$12 billion by 2023 as it seeks to transform the country into an upper-middle-income economy by 2030. Our business reporter Freeman Makopa (FM) caught up with Mines and Mining Development deputy minister Polite Kambamura (PK) for an insight on developments in the sector. Below are the excerpts of the interview:

FM: Zimbabwe’s mining sector never stopped during the pandemic. How did this benefit the sector?

PK: Mining operations were not completely stopped during the Covid-19 pandemic and this assisted in seeing that on-going projects were not completely shut-down. They kept on going although they lost time during the period of complete lockdown and we also managed to control the pandemic and we did not lose a lot of workers. In addition to that, revenue flows to the fiscus did not stop completely. Some operators stockpiled their production for export and we kept on going. That assisted us to keep on focused the achievement of our US$12 billion mining sector by 2023.

FM: Invictus energy was test drilling for oil and gas in Muzabarani; can you brief us on developments on this front?

PK: On the issue of joining the hydro-carbon club, as you might be aware currently there is an exploration that is on-going and there is a well that is being sunk by a company called Exalo. Upon confirmation of the resource government will come up with a position of joining other bodies, which are into hydrocarbon, oil organisations and so forth and only after confirmation of the resource. Currently we do not know what is there. That is why the investor, after doing other surface works, they know want to confirm the existence of crude oil and gas by drilling two wells, which they will be starting sometime this year.

FM: What is your message for foreign investors looking into mining and into Zimbabwe in general?

PK: To potential investors who want to come and invest in the mining sector, the mining sector is open for investments with government having extended a number of incentives to investors. Chief among them being importation of capital equipment duty free and extension or provision of tax holidays to investors.

FM: How much are you targeting to rake in from mineral exports at the end of this year?

PK: We are looking forward to achieving about US$8 billion by year-end so that is the targeting that we are working towards achieving and at the moment we are at US$6 billion there about. So we think by December we will be around US$8 billion and come 2023 we should be somewhere close to the milestone.

FM: Which policies have you implemented to enhance the operating environment for mining players?

PK: Government has come up with several policies but I cannot mention all to enhance the mining environment as you are aware under NDS1; the chief anchor of that blueprint is local beneficiation of our minerals. We have been losing a lot of revenue through exportation of raw minerals so government’s thrust is about local value addition and beneficiation. This has seen a ban on exportation of raw chrome, ban on exportation of raw granite and a ban on value addition for our diamonds abroad. So we want companies to come and set base locally, build smelters, build beneficiation facilities locally and base metal and precious smelters refinery locally so that when we export we are exporting a product of higher value. We are also working to finalise the implementation of the mining Cadastre system. This will see much improvement in the way we have been issuing our title and the way we have been managing title and so forth. So it is actually a game-changer in the sector. Before the end of this year, we would have commissioned the mining cadastre system.

FM: What about in terms of the country’s legislation?

PK: As you are aware, we have been in the process of amending the main legislation, which governs the mining sector that is the Mines and Minerals Act. Currently it was approved by the Cabinet committee on legislation, approved by Cabinet and we are now working on gazetting it, and then bring it to Parliament for public consultations before it will be signed into law by the President. So we have amended our Act to allowing it with other regional and international legislations which govern the mining industry. We have also amended it to be in sync with other supporting acts and legislations, which govern other sectors, which this sector at times work with, like the ministry of lands, the Land Act should speak the same language with the Mines and Minerals Act. The Rural District Councils Act should speak the same language with our main legislation. So this is what we are working on. We cannot say we have improved the mining sector or environment without looking at the main legislation.

FM: Power outages have affected mining companies. What efforts are in place to address this concern by the sector?

PK: On the issue of energy I think a broader understanding may be retrieved from the Ministry of Energy and Power Development. However, from the mining sector perspective, we are just encouraging our miners to use equipment that is efficient and also to replace antiquated equipment which consumes a lot of power and are less efficient. We are also encouraging the sector to install solar plants as an optional energy in case of power cuts or breakdowns. So in the coal sector there are a lot of companies who are into coal and some into thermal power stations and we are working hand in glove with these companies so that they quickly finish their projects so that we have additional power into our grid. So basically this is what we are doing on our side but I understand the Ministry of Energy and Power Development do have a clear roadmap of how they will be tackling this challenge but all the same that is not a big setback towards the ministry’s goal of achieving a US$12 billion industry next year.

FM: The Mines and Mining Development ministry disclosed that it lost US$300 million to US$400 million during Covid-19 outbreak, which steps have you implemented to curb such losses in the future?

PK: That loss was mainly attributed to falling prices due to the pandemic. So it is something that is difficult to plan against. National disasters or pandemic come in different forms, like if there is an earthquake today, it is difficult to plan against and earthquake. As the government, the measures that were taken by government minimised this loss quite a lot. It could have been more. We thank the government for coming up with measures to minimise such losses brought by such pandemics, as and when they come because we will not know what kind of pandemic is coming next. Maybe the next one will not be Covid but something else.

FM: Granite producers have bemoaned the ban of raw granite by the government. Have they come to you and made any presentations on this issue?

PK: On the ban of raw granite there is no reverse on that. We want those companies in granite mining to value add and beneficiate locally. The only companies that we are considering are those that have brought to the ministry commitments to build value addition plants or beneficiation plants locally. We have licenced them to operate for a limited period, which will expire. When they expire and if they have not committed to any beneficiation plant locally, then they will have to sell their produce to those, who would have constructed beneficiation plants. This is in line with the NDS1 blueprint to value-add and beneficiate our minerals locally.

FM: The mining sector has decried that the foreign currency retention thresholds are crippling their operations.  What is the way forward on this issue?

PK: This is under review by the ministry of finance. They are looking into it and a policy pronouncement will be given once they are through with the considerations that they are making.

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