‘Mining to underpin currency stability’

Era of exporting raw products over
Government ready to meet mines’ energy demand
Prosper Ndlovu in Gwanda

THE massive growth of mining investments under the Second Republic is creating more job opportunities across the country while the steady increase in precious minerals output is expected to anchor enhanced stability of the local currency, President Mnangagwa said yesterday.

Officially commissioning the US$67 million new Central Shaft Expansion Project and the 12,2 megawatts solar plant at Blanket Mine in Gwanda, Matabeleland South Province, the President said the investment was a huge success story for the mining sector and the country as a whole.

The Victoria Falls Stock Exchange (VFEX)-listed investor, Caledonia Mining Corporation Plc, launched the Central Shaft project in 2015 and completed it last year, making the mine one of the deepest in the country at 1 200 metres below the surface, tapping into the higher ore deposits.

President Mnangagwa said the massive expansion project was part of the country’s efforts to build momentum towards realisation of the projected target of producng 60 tonnes of gold annually by 2023, which is a major component of the US$12 billion mining milestone.

The investment has positioned Caledonia to increase its output to about 80 000 ounces per annum while employment levels have been pushed to above 1 600 workers from 500 with revenues increasing from US$123 million per annum to more than US$148 million.

With such mega-investments across the country, President Mnangagwa said Zimbabwe was poised to realise maximum value from its vast mineral endowments for the good of the economy, including stabilising the currency and ensuring improved livelihoods for ordinary people.

“As a Government we have made a bold decision to ensure that every citizen benefits from our rich natural resource now and into the future hence from 1 October, the collection of half of the royalties from gold, diamonds, platinum and lithium, among other precious stones and valuable metals, shall be made in the form of physical stocks of the mineral concerned,” said President Mnangagwa.
He said the policy will undoubtedly have ripple effects on currency stability as the country benefits from the envisaged positive output growth across all minerals on the back of firm commodity prices and a conducive operating environment.

Economists across the globe are agreed on the significance of enhancing the value and confidence of the local currency through backing it with precious mineral reserves such as gold, diamond or platinum.

The country could also access lines of credit by leveraging on such royalties. President Mnangagwa said the growth of the mining sector continues to provide decent new jobs across provinces and is positively impacting provincial Gross Domestic Product (GDP) growth.

This makes a compelling case for Zimbabwe to upscale revitalisation of domestic value chains, said the President, adding that the era of reliance on exporting primary products was over and must be stopped.

“We cannot as a country continue to be exporting primary products, including concentrates and ores.

Our people must fully enjoy the benefits of ‘moving up the value chains,” he said.

“In line with Vision 2030 and NDS1, greater efforts should be made towards value addition and beneficiation of our mineral resources, and primary products.

“This is now more urgent given the increased outputs from the mining sector as well as other sectors such as agriculture.”

President Mnangagwa said Caledonia’s investment milestone was a testimony of the favourable investment climate created by the New Dispensation, which has seen the group not only expanding mining operations but also being one of the first companies to invest on the VFEX, showing that indeed “Zimbabwe is Open for Business”.

Guided by NDS1, he said Government would continue to support expansion of existing mines and fine-tune the ease of doing business climate to allow local and foreign businesses to flourish.

The President also urged other mining houses to transform into low carbon operations while embracing new technology and innovation as well as prioritising local procurement.

This would in turn create opportunities for capacitated local manufacturers to produce and supply competitively priced goods and services resulting in development of robust supportive industrial clusters.

These must be bolstered by science, technology and innovation development across all sectors as a critical path to leapfrog the modernisation and industrialisation of Zimbabwe, he added.

Given its massive potential, the President said the expansion of the mining sector must be harnessed to steer growth of other sectors of the economy for the realisation of Vision 2030’s broad-based sustainable socio-economic development.

He also noted that new investments by Caledonia and others are not only expanding exports and employment but increasing demand for power.

In that regard, the President commended the company for investing US$14 million on its 12,2 megawatts solar plant saying this was in line with the Government’s policy on increasing the use of green energy.

He said Government is committed to boost domestic energy generation to meet growing industry needs and hinted that the US$1,4 billion Hwange Power Station’s Unit 7 and 8 Expansion project was nearing completion with the first unit expected to come on stream and add 300 megawatts onto the national grid this month.

Speaking at the same occasion, Matabeleland South Minister of State for Provincial Affairs and Devolution, Cde Abednico Ncube, said investments at Blanket Mine were creating direct and indirect employment, increased export revenues and advancement of the province’s economy in a big way.

“We are proud as a province to have such a large-scale gold mine operating within our midst and contributing to the Zimbabwean economy,” he said.

Mines and Mining Development Minister, Winston Chitando, said Blanket Mine’s success story was a fulfilment of commitments made during the signing of a Memorandum of Understanding between the company and the Government in 2020.

He said the new investments will go a long way in enhancing operating efficiencies and economies of scale that will boost the company’s profitability.

Caledonia chief executive officer, Mr Mark Learmonth said the opening of the Central Shaft Project was major milestone in the company’s expansion journey. He re-affirmed the company’s confidence in

Zimbabwe as a favourable investment destination saying the group was focused on expanding its footprint by acquiring more assets and diversifying its operations.

Industry and Commerce Minister, Dr Sekai Nzenza, also said Blanket Mine’s growth was a demonstration of business confidence in Zimbabwe and stressed the need to unlock further value chain opportunities linked to the mining sector.

Defence and War Veterans Minister, Cde Oppah Muchinguri-Kashiri, Mines Deputy Minister, Cde Polite Kambamura, senior civil servants, industry leaders, service chiefs, traditional leaders and Chamber of Mines executives, also attended the event.

Article Source: The Chronicle