Gold and non-gold sectors are benefiting from central bank measures
Zimbabwe's mining on road to recovery
August 20, 2004
By Stella Mapenzauswa
Harare - Zimbabwe's mining industry was on track for recovery after central bank measures boosted earnings and access to foreign currency for imported raw materials, a senior industry official said yesterday.
Last year the Chamber of Mines said about 12 gold mines had closed over a three-year period amid steep operating costs and delays in payments to producers by the Reserve Bank, the sole buyer of the precious metal in Zimbabwe.
David Murangari, the chamber's chief executive, said the gold sector, which accounts for about 52 percent of all mineral production in the country, had been buoyed by an increase in the central bank's support price for producers to Z$85 000 (R100) per gram from Z$71 000.
The non-gold sector was also benefiting from new concessions allowing them to keep more of their hard currency export earnings in return for making timely statutory remittances to the central bank, he said.
"Frankly there is a recovery process and we have reports of improved revenues by the major producers.
Hopefully in the next three months we should be able to see a specific impact in terms of how much surplus companies are able to plough back into finding new resources," Murangari said.
The mining industry has grappled with acute shortages of foreign currency and fuel in recent years, as well as ballooning operating costs.
Murangari said producers, previously forced to source foreign currency from an informal market where the Zimbabwe dollar plummeted to Z$7 000 per US dollar in December, were now able to buy it at roughly Z$5 500 per dollar from central bank-managed auctions introduced in January.
Last month central bank governor Gideon Gono said gold export earnings in the first half of the year rose 87.1 percent to nearly $150 million, after deliveries increased to 10.5 tons from 5.96 tons over the same period last year.
He forecast total output of 22 tons this year and 30 tons in 2005, compared with 12 tons produced during the whole of 2003.
Murangari said the mining sector could surpass the 2005 output target as more companies revisited their mine development and exploration work which were abandoned when times were tougher.
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Rito Tinto in talks over $1.4b coal mine and power complex
Johannesburg - Rio Tinto Zimbabwe said it was in talks with the Zimbabwe Electricity Supply Authority, the state-owned power firm, and unidentified investors to revive a plan to build a $1.4 billion (R9.1 billion) coal mine and power station complex in Zimbabwe, the state-controlled Herald reported yesterday.
The deposit, in the Sengwa district, contains 2.2 billion tons of coal, the newspaper said.
Rio Tinto Zimbabwe, a unit of Rio Tinto Group, shelved the project in the late 1990s after holding talks with the UK's National Power.
It revived the project early this year.
Rio Tinto Zimbabwe needed to agree power tariffs with Zimbabwe's state utility before it proceeded, said chief executive Josphat Sachikonye.
-Bloomberg.
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