ZIMBABWE is poised to leverage its vast mineral resources to drive economic growth, with the government setting an ambitious target of generating US$7 billion in revenue from the extractive industries. To achieve this goal, the Ministry of Mines and Mining Development is working to address the sector’s challenges, including erratic power supplies, mineral leakages and softening prices. Our senior reporter Freeman Makopa (FM) spoke to Pfungwa Kunaka (PK), permanent secretary in the ministry, to discuss the government’s strategy for achieving its revenue target and promoting the growth of the mining sector. Below are excerpts of the interview:
FM: Could you please offer our readers a brief overview of Zimbabwe’s mining sector and describe how it stands out globally?
PK: Zimbabwe is unique in that it hosts many kinds of minerals, which are critical raw materials in many value chains, especially for the manufacturing sector.
Big economies such as China, Europe and the Middle East rely on imports of minerals from Zimbabwe. Zimbabwe is, therefore, a key player globally in mining.
What is critical going forward is for Zimbabwe to maximise benefits out of this advantageous position. Key minerals are platinum, gold, lithium as well as chrome.
We are also set to become a key player in the iron and steel area given the coming into production of Dinson.
FM: What would you identify as the biggest challenges and opportunities for Zimbabwe’s mining industry right now?
PK: The biggest challenge is the decline in global commodity prices, which has affected most minerals over the past one-and-half years.
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Domestic power outages present challenges and generally the undercapitalisation of mines has also been a hindrance. We need to formalise and capacitate the small-scale mining sector, including training on better mining methods. The opportunity that is clear is high demand for minerals globally.
FM: What level of investment is Zimbabwe securing for the development of its mining industry?
PK: The Zimbabwe mining sector has performed better than other sectors in terms of attracting foreign direct investment.
There has been investment in large-scale operations across the sector as demonstrated by projects in lithium, gold, coal and gas, chrome as well as oil in Muzarabani.
FM: Which new and emerging markets within the mining sector are you focusing on?
PK: All sub-sectors of the mining sector remain critical. The focus of the government is promotion of value-addition and beneficiation of all minerals. We have value chains that are of interest drawing from the National Development Strategy 1.
For the mining sector to perform at expected levels, the government wants to promote exploration so as to get better information regarding mineral potential and mining methods.
FM: How much in terms of revenue did Zimbabwe generate last year?
PK: Revenue and proceeds from the mining sector are realised through the usual mining taxes levied through the Finance Act and also the actual mineral exports. For 2024, the value of mineral exports reached US$6,1 billion up from US$5,4 billion, while tax revenue accounted for around 30% (inflows into the) of fiscas.
FM: What is your target for this year?
PK: This year, we are targeting export revenue of US$6,8 billion.
FM: What is your stance towards alluvial mining in Zimbabwe?
PK: Through the new Statutory Instrument (SI) 188 of 2024, the government took a bold move to ban alluvial mining following serious concerns over environmental degradation and damage to rivers and leakage of minerals.
The effect of the ban in terms of the SI is that mining undertaken by registered miners or informal miners is banned and should have stopped.
The SI also declares mining titles such as special grants or claims to be null and invalid. Government is expecting compliance with this position.
FM: Some observers argue that the tax regime in Zimbabwe makes mining unprofitable. What is your take?
PK: If mining in Zimbabwe was not profitable, then we would not have mining companies that are operational and investment in this sector would not be there. The government has incentives for investment in the mining sector which gives mining companies advantages.
The government will collect more tax revenue through the establishment of new mines, expansion of old mines and the establishment and expansion of beneficiation.
Formalisation of artisanal mines and registration of mining entities to be Zimra (Zimbabwe Revenue Authority) compliant (will also play an important role).
FM: Zimbabwe has enormous lithium reserves. How does the country intend to increase production?
PK: The production of lithium can be increased through the establishment of new mines in lithium as well as expansion of current ones.
FM: Does the minister have any plans on curbing illegal mining activities?
PK: Responsible mining audits will be done during the year by a team from 11 government institutions.
Gold mobilisation exercises will be held every quarter, while mine inspections will be done regularly on all mining sites.
