[miningmx.com] – ZIMBABWE needs to improve its competitiveness by finalising its mining policy and revising mining fees and taxes to acceptable levels, said
Alex Mhembere, the president of the Chamber of Mines of Zimbabwe.
Speaking at a conference of industry executives in Victoria Falls, Mhembere said the risk of failing to act was a further decline in the resources sector.
Zimbabwe has vast mineral wealth which the country’s government was hoping to capitalise upon in order to develop the economy. The World Bank said the country would only manage an economic growth rate of 3.1% for this year in stark contrast to ambitious government projections of 6%.
The World Bank has cited subdued growth in the mining sector. Mhembere said the industry had potential to contribute to economic growth, but he added that the government needed to act on issues such as policy framework finalisation and reducing taxes and other mining fees.
“The government must not kill the goose that lays the golden eggs through high taxes and fees,’ said Mhembere, who is also CEO of Zimplats, a unit of world number two platinum producer, Impala Platinum.
Zimbabwe could “create an industry that is robust’ and able to lift the economy out of its current troubles ranging from liquidity constraints and capital constraints. However, a less competitive investment climate is limiting this potential, he said.
“We need to focus on improving our country competitiveness to attract investment. During the period under review, the industry struggled to pay power tariffs and this affects their viability,’ said Mhembere.
Chamber of Mines CEO, Isaac Kwesu, said in note released at the start of the conference that “the hanging indigenisation issues and policy inconsistencies continued to erode investor confidence’ while “softening commodity prices’ further worsened the mining sector’s industry woes.
Zimbabwe Mines and Mining Development Minister, Walter Chidakwa, told mining executives that Zimbabwe had vast mineral riches, but its populace remained poor. He said there was a need to translate mineral wealth into developing the economy and enriching people’s lives in the country.
“In terms of resources versus per capita, we are resource rich but we are poor. Why are we poor when we have mineral wealth,’ he said.
However, Mhembere said the mining sector’s contribution to economic upliftment and social well-being of the country’s populace was linked to mineral prices. He said the industry’s “revenues were determined at a world platform’ through a marketing system determined by supply and demand.
Mining projections from the Chamber of Mines and the Ministry of Mines showed that gold output for 2013 was 14 tonnes. This year, the gold mining industry – which was said to be facing severe operational constraints – will marginally rise to 15 tonnes.
Mhembere said the gold industry had started “to show signs of fragility’. Platinum output is projected rise to 14,000 tonnes this year compared to about 13,000 tonnes produced last year.
