THE CHAMBER OF MINES

OF ZIMBABWE

Overview of Zimbabwes Mining Sector

ALEX MHEMBERE
PRESIDENT
CHAMBER OF MINES OF ZIMBABWE
Presentation Outline
Zimbabwes mineral resources

Contribution of the mining sector to Zimbabwes

economy:
Where have we come from?
Where are we now?

Where to for Zimbabwe? Mining as the cornerstone

for economic growth

Conclusion
 THE CHAMBER OF MINES

OF ZIMBABWE

Mining Sector Overview

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 happenwe 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

4
 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

5
 THE CHAMBER OF MINES

OF ZIMBABWE

Contribution of the Mining Sector to Zimbabwe:

Where have we come from?
Mining, the Driver of Economic Growth

The mining sector has to date been the most dynamic sector of
the Zimbabwean economy, leading the 2009-2011 rebound with
average annualised growth of 35%.

Aug 2013 7
Value of Mineral Exports
Positive correlation between export growth and mineral export
growth
5000

4500 Value of mineral exports (1980- 2012)

4000

3500

3000

2500

2000

1500

1000

500

0
1980 1990 1996 2000 2005 2006 2007 2008 2009 2010 2011 2012

mining exports (USD million) national exports (USD million)

Exports by Category
ContributiontoTotalMineral
Exports

1993-2003 (%) 2004-2011 (%) 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

9
Gold Price vs. Zimbabwe Production
Gold Price (USD/oz)
2000
1500
1000
USD

500 Avge Global

0 Price (USD/oz)
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Zimbabwe Gold Output (kg)

25000.0

20000.0

15000.0
Output (kg)

10000.0

5000.0

0.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

10
Nickel Price vs. Zimbabwe Production
Nickel Price (USD/t)
40000

30000

20000 Average
USD

Global Price
10000 (USD/t)

0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Zimbabwe Nickel Output (t)

12,000.0

10,000.0

8,000.0
Zimbabwe Output (t)
6,000.0

4,000.0

2,000.0

0.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

11
Coal Price vs. Zimbabwe Production
Coal Price (USD/t)
80

60 Average Global
Price (USD/t)
40
USD

20

0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Zimbabwe Coal Output (t)

4,000,000
3,500,000
3,000,000
2,500,000 Zimbabwe Output (t)
2,000,000
1,500,000
1,000,000
500,000
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

12
 THE CHAMBER OF MINES

OF ZIMBABWE

Contribution of the Mining Sector to Zimbabwe:

Where are we now?
Mineral Output Performance
Mineral output for 2013 expected to surpass 2012 production
Mineral 2012 2013 2013
Actual Jan-June Projection
Actual
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 10,000

Diamonds (tons) 12,014,802 - 16,900,000

Source: Ministry of Mines, Chamber of Mines

14
GDP Contribution
Mining Contribution to GDP (1995-2015)

17.80%
16.90%

15.70%
15.00%

13.00%
12.00%

8.00%

4.30%
3.80% 4.00% 3.90%
3.70%

1995 1996 1997 1998 1999 2009 2010 2011 2012 2013f 2014f 2015f

Aug 2013 15
Direct Tax Contribution
Total Tax Paid Directly by Mining sector to government ($)

445,000,000.00

387,300,000.00

167,523,764.07

57,800,000.00

2009 2010 2011 2012

Aug 2013 16
Employment in the Mining Sector
People Employed in the Sector
70000

59000
60000

51000
50000
45000 45918 45200 45800

39000 38516 38616

40000 37971

33289

30000

20000

10000

0
1990 1995 2000 2004 2006 2007 2008 2009 2010 2011 2012

Aug 2013 17
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 18
 THE CHAMBER OF MINES

OF ZIMBABWE

Where to for Zimbabwe? Making Mining the

Cornerstone of Economic Growth
Making Mining the Cornerstone of
Economic Growth

With the new thrust of mining as the cornerstone of

economic growth, its imperative to:
1. Resuscitate existing mining operations

2. Develop new mines

3. Beneficiate mineral output

4. Establish linkages between the mining sector and

other sectors of the economy, particularly
manufacturing
Resuscitation of Existing Mines
Gold Production (kg), 1980-2012
30000

25000

20000

15000

10000

5000

0
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: COMZ 2012 and RMG 2012

Resuscitation of Existing Mines
Coal Production (tonnes), 1980-2012
Resuscitation of Existing Mines
Nickel Production (tonnes), 1990-2012
Resuscitation of Existing Mines
Development of New Mines
- Capital - Knowledge - Innovation

Refineries
Feasibility Studies Required
Exploration & evaluation
Design, planning & costing for all
Stages
Smelter
Drying, smelting
Shaft sinking
Converting
Drill, blast, clean, support
Equip

Concentrator
Development Mill
Footwall off-reef and on- Flotation
reef
Drill, blast, clean, support

Stoping Transport
Drill, blast, clean, support Shaft hoisting
Underground rail transport Surface rail transport

25
Beneficiation
The Chamber of Mines is in full support of the Governments call for
beneficiation of mineral output

1. 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

2. 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
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. 2012 production was
29.5tonnes.
Shabanie and Mashaba Mines
have been operating below
capacity
Chromite Beneficiation

Beneficiation in chromite mining has

been taking place through the
production of ferrochrome

Production: 2012 production was

31.82% down on the previous year at
408,475.81 tons.

Most of the smaller smelters remained

under care and maintenance during
2012, with ZIMASCO being the only
smelting facility operating
Coal Beneficiation

Mining beneficiation is taking place

with the use of coal in power stations

Most potential in the sector has

There will be a picture of the mine
here
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.
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
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 1.46
Mt, and then fell to zero in 2008
Nickel Beneficiation

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
There will be a picture of the mine
here
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
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
Building Linkages

Its critical that linkages with other sectors are created, especially
manufacturing

Zimbabwes manufacturing sector has been hamstrung over the past

15 years, therefore capacity for manufacturing beneficiation is
limited
Capacity Utilisation in Zimbabwe
Manufacturing

2012 Capacity Utilisation in Zimbabwe Manufacturing

90.0%

80.0%

70.0%

60.0%

50.0%

40.0%
Level of utlisation
30.0%

20.0%

10.0%

0.0%
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Source: CZI State of

Manufacturing Survey,
Case Study: Building
Linkages

July 2013 36
 THE CHAMBER OF MINES

OF ZIMBABWE

Prospects for the Mining Industry

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
THE CHAMBER OF MINES

OF ZIMBABWE

Conclusion
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-

1998 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

 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