AMN - Investors warming to Zimbabwe - comment by Yolanda Torrisi

After years of uncertainty investors are warming to Zimbabwe’s mining sector. The country’s Mines and Mining Development Minister Walter Chidakwa said during the 2017 Mining Indaba that the general perception for a long time had been that Zimbabwe was not investor friendly but this was changing.

He said investors were now accepting that certain government policies they had previously denounced were critical in addressing historical economic imbalances and that the country was now moving forward as a result of the policies, which included the fast track land reform program and the indigenisation and empowerment regulations.

Minister Chidakwa said there was now recognition that these issues were aimed at ensuring local communities had access to the land they now used to grow personal economies. He used tobacco farming as an example of the success of the policies that resulted in more than 260,000 families resettled on prime agricultural land. He said there were now more than 100,000 mostly indigenous farmers making a living from tobacco. Prior to the policy there were only about 4500 white farmers occupying more than 21 per cent, or 8.2 million hectares, of the country’s total area.

In understanding that background, he said, investors now comprehended that Zimbabwe was trying to resolve colonial deficiencies and in the process ensuring there was a role for foreign investors.

The country’s mining industry primarily comprises a diverse range of small to medium mining operations with the most important resources including gold, chromite, coal and base metals. The industry contributes approximately 8 per cent towards the country’s GDP, although the Chamber of Mines says it is as much as 16 per cent, contributes more than 60 per cent of annual foreign exchange earnings and comes second to agriculture.

The government has designated the mining sector as being a key driver of Zimbabwe’s economic growth in the short to medium term with emphasises on minerals such as gold, platinum, coal, nickel and diamonds.

Minister Chidakwa said Zimbabwe needed foreign investment to come into areas where it does not have capacity such as capital intensive technology, equipment and machinery. However where basic to medium technology was required, there was a need to capacitate locals to be able to participate in the economy.

He also noted that multinational mining firms were gradually warming to Africa’s mining vision of moving away from the colonial mentality of self-centredness to an approach that seeks to ensure communities in which they extract minerals also benefit from their mining activities.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the African continent. Contact:yolanda@yolandatorrisi.com