Growth in Zimbabwe mining sector forecast to slow in 2023

GROWTH in Zimbabwe’s mining sector was forecast to slow in 2023 owing to rising costs and chronic electricity shortages, said Reuters.

Citing a report by the country’s Chamber of Mines, the newswire said the sector will experience a slower 7% growth next year from a projected 8% for 2022.

“Prospects for mineral output growth for 2023 are generally lower than those recorded in 2022. Key risks to the outlook for 2023 include fragile power supply, high costs, foreign currency shortages, an unstable tax framework and capital shortages,” the report says.

Mining costs are projected to increase by 15% in 2023, with energy being the main driver, the report said. Zimbabwe’s miners often suffer power outages due to the frequent breakdowns of the country’s old generation plants.

Zimbabwe’s state-owned power utility gets some electricity from neighbouring countries to plug the deficit and now bills miners in foreign currency to fund the power imports, a move which mining companies say has driven operating costs higher, said Reuters.

Zimbabwe has significant reserves of platinum group metals, gold, chrome, coal, diamonds and lithium and its mining sector contributes about 11% of the country’s gross domestic product and over 60% of its export earnings, the newswire said.

Mining companies operating in Zimbabwe include Anglo American Platinum, Impala Platinum, Sibanye-Stillwater and Russian diamond producer and marketer, Alrosa.