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All Zimbabweans must benefit from mineral Resources: Zimcodd

by Stephen Jakes
07 Apr 2022 at 11:08hrs | Views
THE  Zimbabwe Coalition of Debt and Development has reported that in the week under review, Zimbabwe registered a big milestone in the mining of Platinum Group Minerals (PGMs) with the addition of a South Africa-based company, Tharisa Capital.

It stated that the company which has increased its shareholding to 66.3% from 26.8% in a US$27 million new shares deal will invest about US$250 million in the first phase of the Karo project.

"The mine will be developed over the next 24 months to produce 15 000 ounces per annum over 20-year mine life. This is a huge step in the government's quest for a US$12 billion mining sector economy by 2023 with PGMs expected to contribute US$3 billion, second place from gold estimated to generate US$4 billion annually. Currently, Zimbabwe has 3 PGM producing mines; Zimplats in Chegutu, Unki Mine in Shurugwi, and Mimosa Mine in Zvishavane," said Zimcodd.

"According to the World Platinum Investment Council (WPIC), output from these 3 miners rose by 6% from 448 000 ounces in 2020 to 475 000 ounces in 2021thanks to the processing of semi-finished inventory backlog through South African smelters and refineries. There are also other ongoing PGM projects in Zimbabwe like Bravura Holdings in Selous and Great Dyke Investment (GDI) which is set to become the largest PGM miner capable of 860 000 ounces per annum when fully completed."

The debt watchdog said PGMs have become one of the top forex generators, contributing about US$1.4 billion to 2021's US$6.3 billion total exports, only US$200 million away from the top earner, gold exports.

"Earnings from minerals are expected to continue surging this year driven by the ongoing Russia-Ukraine war. Minerals such as copper, lithium, nickel, and aluminium reached all-time highs in March 2022 as fears of shortages in a global economy that is already facing increased mineral demand as it continues with its rebound from the COVID-19 pandemic sent prices rallying. Global producers are still receiving minerals of Russian origin. However, if the UK, EU, or the USA announce sanctions directly targeting these minerals, many producers will be forced to stop orders and suspend pre-existing contracts. The artificial shortages created by the shunning of Russian minerals will keep global mineral commodity prices elevated at least through the first half of the year," it said in a report.

"Since 2020, the gold sector has also benefited from increased global uncertainties posed by the COVID-19 pandemic. As a footnote, gold is a safe-haven asset during these times, a characteristic it derives from its long history of use as a store of value and medium of exchange. Before the war, many global central banks were increasing their gold purchases, a move that is likely to continue, thanks to the sanctioning of Russia's US$ denominated foreign currency reserves and the quest by Russia to save its currency from the jaws of Western sanctions by accumulating gold reserves. While the Russia-Ukraine war is reversing the move away from fossil fuels, countries will invest heavily in green energy to reduce their energy dependence and attain energy security. This entails an increased production of green energy in the medium to long-term period thus boosting prices of green-energy supporting minerals like lithium and nickel which are used in the manufacturing of batteries for electric vehicles (EVs)."

Zimcodd noted that Zimbabwe boasts significant reserves of these minerals, hence, the nation is expected to largely benefit from elevated global prices.

"However, Treasury coffers continue to dwindle in the face of rising global mineral prices as mining revenues are being siphoned through illicit financial flows (IFIs). For instance, the government estimates that it is losing about US$100 million (US$1.2 billion) per month (year) of gold revenues through smuggling. It is also unfortunate that the fewer revenues received by the government are abused, misused, embezzled, and diverted for private gain by public officials with impunity, as indicated yearly by public records from the Auditor-General's audit reports on the Consolidated Revenue Fund and procurement patterns of government ministries, departments, and agencies (MDAs)," it said.

"The continued dragging of the Mines and Minerals Amendment Bill between the corridors of the Legislature and the Executive since 2016 illuminates the embrace of porous mineral resource governance by these authorities. Therefore, there is need for political will and thorough stakeholder engagement to fast-track direly needed amendments to the existing archaic Mines and Minerals Act of 1961. Also, Parliament should give oversight to the private mining investment deals to ensure that they don't only benefit the investor but all stakeholders particularly the mining host communities and marginalized communities of Zimbabwe."

Source - Byo24News