TOP STORIES

Falling metal prices: Mining companies seek Government intervention

Western sanctions on Russia over its invasion of Ukraine are forcing metals supply chains to reconfigure along geopolitical lines

FALLING global metal prices are taking a heavy toll on the viability of local mining companies amid fears this could force some of the entities to scale down operations in order to contain rising costs and maintain profitability.

The mining companies have since made an impassioned plea for the Government to intervene to limit the impact of the falling global mineral prices.

They have proposed interventions such as a reduction of some of the taxes and cost of key enablers like electricity.

Mining is a strategically key economic sector for Zimbabwe.

Apart from employing thousands, mining in Zimbabwe accounts for over 12 percent of gross domestic product and generates well over three-quarters of the country’s export earnings.

Zimbabwe has more than 60 extractable minerals but limited investment means less than 10 are currently being commercially exploited. Among these are gold, platinum, diamond, chrome, nickel, coal and lithium.

Over the past 12 months the mining industry across the globe has experienced softening prices for key minerals with the most affected being rhodium -74 percent, lithium -69 percent, diamond -60 and nickel -8 percent.

The World Bank’s metals and minerals price index rose 10 percent in the first quarter of 2023. Price increases at the beginning of the year reflected positive sentiment about stronger demand amid supply disruptions for some key metals.

Metal prices were forecast to fall this year as supply recovers amid weak demand in advanced economies and China. Zimbabwe’s mining companies said operating costs had increased by 10 percent in the past 11 months.

Chamber of Mines of Zimbabwe (CoMZ) chief executive Mr Isaac Kwesu said in an interview the mining companies had been hit hard by the plunging global commodity prices.

Mr Kwesu said there was very little mines could do about the situation given that they are only price takers of global metal prices.

The CoMZ boss said while metal prices were coming down on the international market, costs were heading north, negatively impacting the viability of miners. This, however, jeopardises Zimbabwe’s ambitious target to grow mining to a US$12 billion industry by the end of this year.

Zimbabwe’s foreign currency receipts reached US$5,5 billion in the first-half of 2023 driven by exports and diaspora remittances among other top earners, according to the Reserve Bank of Zimbabwe (RBZ)’s mid-year Monetary Policy Statement (MPS) review.

The Government has designated mining as one of the key anchors expected to drive short to medium-term economic growth.

Chronicle

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

RBZ digital gold coins reach 737kg

THE Reserve Bank of Zimbabwe (RBZ) has issued 736,52 kilogrammes worth of gold-backed digital tokens since their introduction towards the end of last year. The tokens, which are called Zimbabwe Gold or ZiG became an approved means of payment for domestic transactions with effect from October last year. Introduced following the Monetary Policy Committee’s resolution […]

Read More
Zimbabwe National Road Administration chief executive officer Nkosinathi Ncube (right), flanked by board chairperson Dr George Manyaya and deputy board chairperson Ms Lizwe Bunu, speaks to the media during a Press conference in Harare yesterday.
Business

Zinara to roll out e-tolling this year

THE Zimbabwe National Road Administration (Zinara) will begin rolling out e-tolling before the end of the year to improve efficiency, motorists’ convenience and reduce operational costs. E-tolling is a cashless system that allows road users to make payments for road use with card facilities or e-tags at toll gates, with payments being made without vehicles […]

Read More
Business

Global commodity price slump chokes Zimplats

PLATINUM group metals (PGMs) producer Zimplats has been affected by the global softening of metal prices, which saw the firm incur a 32 percent revenue drop in the six months ended December 31, 2023. Due to the negative developments in the global economy, prices for most mineral commodities including platinum, nickel and lithium have been […]

Read More