Zimbabwe's minerals revenue hits US$2 billion

MINerAL revenues reached US$1,95 billion at the end of October this year, beating a projected US$1,52 billion target set by the Minerals Marketing Corporation of Zimbabwe (MMCZ), official statistics showed last week.

The US$1,95 billion was well within the country's annual mining sector revenues, which have been consistently at about US$2 billion.

This could be also an indication that the mining industry was less affected by blanket lockdowns announced by government in March.

The Mines ministry has lined up a strategy to scale up mineral revenues to US$12 billion annually by 2025.

MMCZ general manager Tongai Muzenda told Standard Business last week the revenues reported in october were 21% above budget, with platinum group metals, ferrochrome and chrome ore among the biggest contributors.

Commenting on chrome, Muzenda acknowledged deliveries were low, but the MMCZ was working on a payment plan that would encourage producers to up their output.

There has been a surge in small-scale miners entering chrome mining.

But these have been complaining about low prices being offered for their chrome ore by domestic buyers.

"When the small-scale miners are in the bush, they sell their produce at even below half the standard price because they just want quick money," Muzenda said.

"We do have some ideas, but currently we have to conclude the chrome policy, which is being drafted.

"One of the ideas is to secure funding or sponsorship so that we pay producers half their money on delivery, then the balance is paid when the chrome is sold.

This depends on grades and everything.

"For example, we might say, your chrome can get you US$60, so we pay US$30 and stockpile, then the balance is paid when we sell."

Primary chrome producers have not been spared by forex shortages and erratic power supplies, which have seen players turn to solar solutions in the long term as diesel-powered generators eat into profits.

Global prices of some commodities like chrome fell as industries shut down worldwide due to Covid-19, while border closures affected diamonds auctions and other precious minerals.

The mining industry has been particularly affected by a contentious foreign currency retention system that forces companies to sell part of their minerals in the volatile domestic currency.

Finance minister Mthuli Ncube proposed in his 2021 national budget that businesses pay corporate income tax in foreign currency on the basis of gross foreign currency receipts remaining after deducting the prescribed retention or liquidation thresholds effective January 2021.

Gold deliveries to Fidelity Printers and refiners (FPr) tumbled by 16,7 % to 1,5 tonnes in November compared to the same period in 2019 after deliveries from small-scale producers declined significantly, statistics showed last week.

FPr said gold deliveries stood at 1,48 tonnes in November 2020, compared to 1,84 tonnes during the same period last year.

Deliveries from primary producers increased by 30kg to close November at 894,7kg.

Deliveries from small-scale producers fell by 40,1% to 581,6kg as side-marketing persists due to payment delays at FPr, the country's sole gold buyer.

FPr has been reeling under foreign currency shortages.