In the 6th State Of The Mining Industry Prospects For 2021 Report, Zimbabwe’s mining sector representatives projected an optimistic outlook for 2021, citing an improvement in COVID-19 control, rising commodity prices, and an improved fiscal environment.
The mining sector faced a difficult year on the back of falling commodity prices. The situation was exacerbated by the impact of the COVID-19 pandemic which ravaged the entire globe.
The findings of the report indicate that the mining sector business confidence index is expected to improve to +3.1 in 2021 from 2.2 in 2020. The mining sector business confidence index is a measure of optimism (or lack of it) among mining executives.
Of the respondent interviewed, 90% of the miners in the country said they are looking forward to expanding their businesses in the coming year. This is in contrast with the 10% that don’t foresee any change in the environment and as such expect business to remain at the same level. In terms of profitability, 70% of mining sector executives anticipate a profitable year ahead.
The report anticipates that gold production will be ramped up to 33 000 kg in 2021 from the 2020 figure of 25 000kg, an increase of 32%
For platinum, the report expects output to move up by 3% to 15 000 kgs.
The coal and diamond sectors are expected to grow by 25% and 19% respectively. The report anticipates coal output at 3 million metric tonnes. Additionally, 2.5 million carats of diamonds will be produced.
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Total capacity utilization in the mining industry is projected to inch up to 80% from the current 61%.
Zimbabwe’s mining sector has been struggling to boost capacity owing to challenges in raising capital and investment. Chief among the main hindrances to capital flowing into the sector is a negative perception about the country and the political risk factor. In addition, the Reserve Bank of Zimbabwe has faced obstacles in paying gold producers timeously, thus gravely affecting working capital for the miners.
These projections are based on an improvement in the pandemic as well as favorable government policies. The anticipated policy improvements include an enhancement in the government’s foreign currency auction as well as payments in time for deliveries of minerals.
Original article on The Exchange