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Friday, January 27, 2023
HomeBusinessMining Houses To Invest US$ 1 Billion Next Year Towards Expansion

Mining Houses To Invest US$ 1 Billion Next Year Towards Expansion

Zimbabwe’s mining sector is set to invest a minimum cumulative US$ 1 billion into various capital projects next year, a report has said.

According to the Mining Industry Prospects for 2023, State of Mining Industry Report launched today, of these capital projects, 72 percent are expected to be completed in the next 24 months.

Zimbabwe’s mining sector has been undergoing a transformation in the past two years evident in many mining companies investing heavily in exploration and equipment.

Companies such as Caledonia Corp, Bindura Nickel Company and Rio Zim have invested in equipment for output growth in the last 24 months.

The report is based on input from the survey by the Chamber of Mines of Zimbabwe that interviewed mining executives on the plans and prospects for the upcoming year.

Mining sector capacity utilization is expected to reach 84% in 2023 with PGMs maintaining their 100 percent utilization. Capacity utilization in the gold sector will gain by 2 percentage points to 87 percent next year while Ferrochrome sector will reach 65 percent from 60 percent this year. The coal sector will increase capacity utilization to 82 percent from 80 percent.

However the survey showed several constraints to production expected in 2023 which includes power shortages, high cost structure, foreign currency shortages, capital shortages and obsolete machinery and equipment.

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The sector is expected to grow by 7% next year on improved volumes despite power cuts which according to mining executives have cost 30% of production in the current season.

Royalties’ rates of 5% for platinum and lithium sectors remain a sticky issue with miners, who are pushing for a downward review to allow competitiveness in the sector. According to some mining executives interviewed in the report, some projects have since been suspended or terminated all together citing an unfavorable tax regime.

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