HARARE – Mining firms at various stages of developing assets in Zimbabwe have given a glimmer of hope about the country’s prospects, saying the strategies that President Emmerson Mnangagwa’s administration has laid out will inspire the southern African country to recovery.
Vast Resources, Prospect Resources and Invictus’ positive projections came as hope for a return to stability in Zimbabwe had fizzled out.
There has been a relentless inflationary surge that has crippled the domestic unit and inspired resurgent black-market currency rates in the past few weeks, pushing commodity prices to the roof.
The southern African country is also battling rolling power blackouts and acute fuel shortages that began in the past year, both of which have dealt a blow on industrial output and magnified serious suffering.
In Harare, Zimbabwe’s Ministry of Finance project GDP growth to slide by 2,1 percent this year, and even the IMF has warned last week that Harare could be stuck at the vortex of a gruelling crisis in the coming year, unless government takes hid to growing calls for real reforms.
AIM-listed Vast Resources, which is focussing on the Chiadzwa diamond concessions, indicated that the company’s management believed in the government’s ability to bring economic stability.
In a note to shareholder contained in the group’s financial results for the year ended April 30, 2019, Vast Resources chief executive Andrew Prelea said management also believed that the business environment in Zimbabwe will continue to improve as government establishes an attractive base for sustainable foreign investment.
Prospect Resources, which is developing the Arcadia Lithium Project said it was expecting ongoing reforms to bear fruit.
“Although we do not participate in or hold a political agenda, we are focused on working with government to deliver positive outcomes for Prospect Resources and all of our stakeholders. 2019 has been a transitional year with the government in February 2019 moving away from a currency that was pegged to the US dollar, to now a floating currency,” it said.
“This has led to short term volatility and disruption but is a crucial step in Zimbabwe developing as a nation that will yield long term value and improved fiscal stability,” Hugh Warner Prospect Resources chairman said in the company’s annual report for 2019. Despite the economic challenges facing the country, Prospect Resources is targeting commissioning within 18 months post financial close of the financing agreements. The international perception is that operating in Zimbabwe is challenging, while this may be true for domestic based business the reality is export generators such as Prospect Resources that operate within a Special Economic Zone will provide the company with significant opportunity,” said Prospect.
For Australian Stock Exchange listed Invictus Energy, the coming year will be incredibly important as the company, progresses the Cabora Bassa Project through farm out and begin preparations for drilling the first exploration well.
The Mzarabani oil and gas project is the largest, undrilled seismically defined structure in Africa.
“The potential of our acreage is truly staggering for a company of our size and we will continue our efforts so that the value is reflected for our shareholders,” Invictus.
The economic situation in the country has been characterised by a debilitating liquidity crunch, foreign currency shortages, rising inflation, spiralling basic commodity prices, erosion of disposable incomes, power outages and low productivity.
“Management believes that a combination of a bullish outlook on polymetallics together with a reduction in Romanian and Zimbabwean country risk premiums will provide significant medium-term growth in the share price and bode well for the financial performance of these businesses,” said Vast Resources.