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Overview of Zimbabwe’s Mining Sector

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Presentation on theme: "Overview of Zimbabwe’s Mining Sector"— Presentation transcript:

1 Overview of Zimbabwe’s Mining Sector
THE CHAMBER OF MINES OF ZIMBABWE Overview of Zimbabwe’s Mining Sector ALEX MHEMBERE PRESIDENT CHAMBER OF MINES OF ZIMBABWE

2 Presentation Outline Zimbabwe’s mineral resources
Contribution of the mining sector to Zimbabwe’s economy: Where have we come from? Where are we now? Where to for Zimbabwe? Mining as the cornerstone for economic growth Conclusion

3 Mining Sector Overview
THE CHAMBER OF MINES OF ZIMBABWE Mining Sector Overview

4 Importance of the Mining Sector
“The mining sector will be the centrepiece of our economic recovery and growth. It should generate growth spurts across sectors, reignite that economic miracle which must now happen…we need to explore new deposits, developing new greenfield projects in the mining sector. Above all, we need to move purposefully towards beneficiation of our raw minerals.” President R.G. Mugabe inauguration speech

5 Structure of the Sector
More than 40 different minerals Diverse mining sector +800 operating mines Ranging from artisanal and small scale mines to world class mines

6 THE CHAMBER OF MINES OF ZIMBABWE Contribution of the Mining Sector to Zimbabwe: Where have we come from?

7 Mining, the Driver of Economic Growth
The mining sector has to date been the most dynamic sector of the Zimbabwean economy, leading the rebound with average annualised growth of 35%. Aug 2013

8 Value of Mineral Exports
Positive correlation between export growth and mineral export growth

9 Exports by Category Contribution to Total Mineral Exports
Contribution to Total Mineral Exports (%) (%) 2012 (%) Gold 57.3 24.2 26.9% HCF 20 10.7 8.6% Nickel 15.1 11.0 0.7 PGMS* 2.3 46.1 27.2% Diamonds 0.8 6.7 26.1% Others 6.8% 1.3% 10.5% RBZ, MOF, Zimstats

10 Gold Price vs. Zimbabwe Production

11 Nickel Price vs. Zimbabwe Production

12 Coal Price vs. Zimbabwe Production

13 Contribution of the Mining Sector to Zimbabwe: Where are we now?
THE CHAMBER OF MINES OF ZIMBABWE Contribution of the Mining Sector to Zimbabwe: Where are we now?

14 Mineral Output Performance
Mineral output for 2013 expected to surpass 2012 production Mineral 2012 Actual 2013 Jan-June Actual Projection Gold (kgs) 14,742 6,727.36 17,000 Coal (tons) 1,784,763 955,086.00 2,000,000 Nickel (metric tons) 7,899 4,887.33 10,000 Platinum (kgs) 10,524 6,599.49 12,500 Chrome Ore (tons) 408,475 92,073 282,000 Palladium (kgs) 8,136 5,068.54 Diamonds (tons) 12,014,802 - 16,900,000 Source: Ministry of Mines, Chamber of Mines

15 GDP Contribution Aug 2013

16 Direct Tax Contribution
Aug 2013

17 People Employed in the Sector
Employment in the Mining Sector People Employed in the Sector Aug 2013

18 Corporate Citizenship of Mining Companies
Contribution of mining companies goes beyond paying taxes Towns and cities have been built around mines (e.g.Bindura, Hwange, Kwekwe and Zvishavane) New local enterprises have been developed through linkages to mining operations Schools and hospitals have been established by mines Sports teams have been established by mining companies (e.g. Hwange FC, FC Platinum) July 2013

19 THE CHAMBER OF MINES OF ZIMBABWE Where to for Zimbabwe? Making Mining the Cornerstone of Economic Growth

20 Making Mining the Cornerstone of Economic Growth
With the new thrust of mining as the cornerstone of economic growth, it’s imperative to: Resuscitate existing mining operations Develop new mines Beneficiate mineral output Establish linkages between the mining sector and other sectors of the economy, particularly manufacturing

21 Resuscitation of Existing Mines
Gold Production (kg), Source: COMZ 2012 and RMG 2012

22 Resuscitation of Existing Mines
Coal Production (tonnes),

23 Resuscitation of Existing Mines
Nickel Production (tonnes),

24 Resuscitation of Existing Mines

25 Development of New Mines
- Capital - Knowledge - Innovation Required for all Stages Refineries Feasibility Studies Exploration & evaluation Design, planning & costing Smelter Drying, smelting Converting Shaft sinking Drill, blast, clean, support Equip Concentrator Mill Flotation Development Footwall off-reef and on-reef Drill, blast, clean, support Stoping Drill, blast, clean, support Underground rail transport Transport Shaft hoisting Surface rail transport

26 Beneficiation The Chamber of Mines is in full support of the Government’s call for beneficiation of mineral output Down-stream beneficiation - Downstream value addition involves a range of activities including large-scale capital-intensive activities such as smelting and refining as well as labour-intensive activities such as craft jewellery and metal fabrication. Mining beneficiation – capabilities of the mining company in the areas of smelting or concentration Manufacturing beneficiation – when manufacturing companies have capabilities to produce a final consumer product Side-stream beneficiation - Refers to inputs, namely capital goods, consumable and services, into the value chain Supported by mining companies in Zimbabwe as well as policy makers To a large extent, mineral beneficiation is already taking place in the country

27 Asbestos Beneficiation
There will be a picture of the mine here Manufacturing beneficiation took place with the manufacture of asbestos cement products Between 1965 and 1978 asbestos was the country's principal mineral in terms of the value of output Production peaked in 1974 at 281kt production was 29.5tonnes. Shabanie and Mashaba Mines have been operating below capacity

28 Chromite Beneficiation
Beneficiation in chromite mining has been taking place through the production of ferrochrome Production: 2012 production was % down on the previous year at 408, tons. Most of the smaller smelters remained under care and maintenance during 2012, with ZIMASCO being the only smelting facility operating

29 There will be a picture of the mine here
Coal Beneficiation There will be a picture of the mine here Mining beneficiation is taking place with the use of coal in power stations Most potential in the sector has remained under-utilised Production averaged over 5mt/yr in the 1990s but fell to 1.9mt in 2009 before recovering to 2.8mt in 2010 and 4.6mt in 2011 Hwange Colliery Company continues to be the largest coal producer with additional production coming from Makomo Resources and Galpex.  

30 Gold Beneficiation Mining beneficiation for gold mining has been taking place through Fidelity Refiniries Production has rapidly recovered to 14.7tons in 2012 compared to 3.6 tons in 2008 since adoption of the multi-currency system in 2009, production Artisanal and small scale miners play a large role contributing to gold output

31 Iron and Steel Beneficiation
There will be a picture of the mine here Mining and manufacturing beneficiation used to take place for iron ore mined at Ripple Creek and Steel produced in Redcliff Production peaked in 1992 at Mt, and then fell to zero in 2008

32 There will be a picture of the mine here
Nickel Beneficiation There will be a picture of the mine here Mining beneficiation took place at the Bindura Smelter and Refinery complex Bindura Nickel Corporation, the primary producer for nickel placed its smelter and refineries on care and maintanence in 2008 For the past 4 years, most nickel production has been from platinum mining operations as a byproduct. Production: Peaked in 1994 at just over 13,000 tonnes

33 Platinum Beneficiation
Three operating mines in Zimbabwe; 2 producing concentrate 1 producing matte after smelting Potential exists for further beneficiation and work is already in progress in this regard

34 Building Linkages It’s critical that linkages with other sectors are created, especially manufacturing Zimbabwe’s manufacturing sector has been hamstrung over the past 15 years, therefore capacity for manufacturing beneficiation is limited

35 Capacity Utilisation in Zimbabwe Manufacturing
Source: CZI State of Manufacturing Survey,

36 Case Study: Building Linkages
July 2013

37 Prospects for the Mining Industry
THE CHAMBER OF MINES OF ZIMBABWE Prospects for the Mining Industry

38 Future Prospects for the Mining Industry
Despite constraints, the sector is poised for marked growth in the next 5 years with World Bank (2012) forecasting positive outlook under two scenarios: 1. Base Case ( current policies and costs) Gross revenues and fiscal revenues of the mining sector to increase by 63 and 87 percent in 2018, respectively, to $4.8 billion and $729 million. 2. Optimistic Case ( assumes investment capital of around $5 billion and optimal policies) Gross revenues and fiscal revenues of the mining sector to increase by 274 percent and 307 percent in 2018, respectively, compared to 2011. The increase in gross revenues and fiscal revenues compared to the base case projections for 2018 are 130 percent and 118 percent, respectively

39 THE CHAMBER OF MINES OF ZIMBABWE Conclusion

40 Conclusion - Zimbabwe is endowed with abundant mineral resources
indeed mining can become the cornerstone of an economic turnaround We need to resuscitate existing mines on care and maintenance to pre levels We need to invest in exploration and new mining development We need to focus on value addition and beneficiation We need to focus on linkages To achieve this, we need to address the following issues: A common national vision Policy consistency. Mining Policy in progress. To now focus on economic & Industrial Policies. Competitive fiscal regime We need to attract investment to the sector Improve critical infrastructure, i.e. electricity, roads and water supply

41 THE CHAMBER OF MINES OF ZIMBABWE ENDS This presentation based on personal views of presenter and does not necessarily represent the views of the Chamber of Mines of Zimbabwe or any other person or organization


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