HARARE – Zimbabwe’s mining sector will put up a strong fight to avert closures this year and help President Emmerson Mnangagwa’s administration press ahead with reforms in a vexing economic terrain.
The sector, had to downgrade 2019 earnings forecasts to around US$2,9 billion, from US$3,4 billion after a resurgent inflationary scourge, foreign currency shortages and high costs led to a few mine closures, according to Isaac Kwesu, chief executive officer at the Chamber of Mines of Zimbabwe.
He said a foreign currency retention scheme announced by the Reserve Bank of Zimbabwe also affected operations.
“It is our hope that we avert any potential closures as we go into 2020,” said Kwesu, who spoke to ENN recently.
“We have also seen some mines downscaling but we don’t want to see any more of them down scaling operations because it is not good for the economy. We have lost ground, but we don’t want to lose more. We have seen mega deals being signed and for them to take off, these challenges must be addressed,” Kwesu told ENN.
“We have also seen some intermittent closures, but we have tried our best not to close operations.
“We were targeting $3,4 billion this year but we may generate around $2,9 billion, which we have always generated. We remain upbeat. We hope that our engagements with government will help us cover lost ground. We have not lost confidence because we still have the resource,” he said.
He said 2019 was one of the worst years for the mining industry, which Zimbabwe has placed at the centre of its recovery prospects following a poor agricultural season and prospects for another drought this year.
Like the mining industry, the manufacturing sector has been affected by power and foreign currency shortages
“The year 2019 was the most difficult for the mining industry, which we want to forget and focus on 2020,” Kwesu said.
“We had quite a number of bottlenecks. We could not meet our expectations due to a number of reasons. One of the major ones was the power crisis, which exposed us as miners. This was compounded by problems in getting enough foreign currency allocations from the Reserve Bank of Zimbabwe, which disrupted operations, especially in gold mines. In addition, inflation increased our local costs and there were disruptions due to multiple exchange rates,” he added.