Posted: ’22-DEC-06 08:00′ GMT- Mineweb.net – Archive

The Southern African country of Zimbabwe has registered an almost six-fold increase in mineral sales for the first 10 months of the year. These totalled US$591m compared to US$103m earned in the same comparative period last year, the Minerals and Marketing Corporation of Zimbabwe (MMCZ), which is charged with the duty to sale and market the country’s minerals apart from gold, announced last week.

The increase in revenue of the minerals comes at a time when the Zimbabwe Chamber of Mines has just announced that the country’s mining industry will likely register a 14.4 percent decline in output this year. In fact figures released by MMCZ indicate that minerals amounting to 749,096 tons were sold within the past ten months compared to 797,297 tons sold during the same period last year.

The growth in value of the minerals sold in Zimbabwe owes much to a surge in mineral prices on the international market. According to MMCZ, Zimbabwe’s mineral industry registered a six percent slump in volume terms the past ten months compared to the same period last year but gained by value terms to the tune of 470 percent.

The slump in volume terms, according to MMCZ is due to the poor showing of high carbon ferrochrome (HCFs), diamonds, steel and copper and gold.

Figures from MMCZ indicate that Zimbabwe did extremely well in the platinum group metals’ concentrates that raked in US$123.86m compared to last year’s US$71.96m. While platinum boosted the country’s mining coffers, steel did the country a disservice, bringing in a total of US$704,000 compared to US$1.2m a year ago.

In terms of volume, steel registered a slump of up to 94 percent, selling a total of 2,116 tons from last year’s 4,161 tons. However the country also registered an increase in both value and volume of chrysotile asbestos fibre which produced 92,479 tons at a tune of US$27.1m last year compared to 83, 687 tons worth US$20.7m this year which translates into 11 percent volume growth and 31 percent growth in value terms.

Despite this generally impressive showing from the Zimbabwe mining industry, which has surpassed the agricultural industry in export earnings, problems abound in the mining sector largely due to the harsh economic climate.

Zimbabwe’s mines are lacking extensive mining recapitalization at existing mines and investment in new mining exploration programmes, according to press reports. The Herald Newspaper reported this week that problems at the Zimbabwe mines are compounded by erratic power supplies and rising mining production costs which are affecting viability.

All these notwithstanding, Zimbabwe’s mining industry is also facing a dwindle due to smuggling of its precious stones. Gold and diamonds are the top two that are highly smuggled from Zimbabwe. Media reports indicate that Zimbabwe’s gold output has largely dwindled due to smuggling and black marketers have found a readily, lucrative market in Zimbabwe’s neighbor – South Africa.

Today there are many Malawians, Zambians, Mozambicans, South Africa and even West African citizens in Zimbabwe’s Marange district smuggling diamond to South Africa. South Africa press early this year reported that gold deliveries in Zimbabwe dipped by 40 percent in 2005 due to smuggling.

And between 2005 and September 2006, says the Herald gold production fell by 24 percent from 10, 552.04 kilograms to 7, 991.57 with smuggling accounting for the difference.

Not only is the mining industry in Zimbabwe affected by economic factors and smuggling, but also brain drain. The economic hardship in the country has forced experienced mine workers to look for jobs else where like South Africa, Namibia, Botswana and other far away countries like Australia.

Retaining skilled staff in Zimbabwe according to reports is an uphill task or an impossible undertaking. Irked by the development, the Chamber of Mines this year wrote the central bank and government showing how staffing levels have reached a critical stage that threatens the viability of the mining sector there.

Media reports in Zimbabwe indicate that mining companies do not keep staff for more than four months despite incentives like top of the range vehicles.

“There are no engineers in the sector right now,” Financial Gazette quoted an anonymous CEO recently. “If you do get one, they don’t stay for four months. We have had to bring other guys from elsewhere to work here because Zimbabweans are leaving for perceived greener pastures.”

But despite these reports, Zimbabwe’s Finance Ministry announced recently that it predicts mining sector will show a positive growth of 4.6 percent in the new year, a feat mining analysts say is as a far-fetched dream as it is overoptimistic, more so with government’s failure to arrest smuggling.

Meanwhile, analysts say government should take advantage of the huge earning it has registered this year from its minerals and use the same in supporting revival of mining production. END


Make sure you also read:

Our top rated IRA company

Learn how to do a 401k to precious metals IRA rollover

Looking To Invest In Gold – Online Buying Guide