Zimbabwe Mining Sector Anticipates Growth Amid Fiscal Challenges

Evidence suggests that Zimbabwe’s mining sector is on track for a recovery, predicting a 7% growth for 2024 driven by expansion projects and stable mineral price forecasts. The Chamber of Mines projects a corresponding increase in mineral revenue, alongside notable rises in gold, platinum, and diamond production. Despite government-imposed challenges, the sector continues to negotiate for better operational terms.

Zimbabwe’s mining sector is poised for a recovery despite facing challenges such as a stringent tax regime and high lending rates. With expansion initiatives and favorable international mineral prices, the industry anticipates a 7% growth in 2024, surpassing the 5% projected for this year and 4% from the previous year. Isaac Kwesu, the Chamber of Mines of Zimbabwe (CoMZ) chief executive officer, projects that the output in 2025 will similarly yield a 7% growth with mineral revenue anticipated to reach approximately US$6 billion, an increase from US$5.5 billion in 2024.

Kwesu noted that the expected growth is significantly driven by ongoing expansion activities, along with a rebound in commodity prices. Specifically, gold production is expected to rise by 9% to around 41 tonnes, whereas platinum and diamond outputs are projected to grow by 4% and 10%, respectively. The government is actively targeting formally registered companies, including mines, by imposing increased tax rates as part of a broader revenue strategy in response to economic challenges.

The government’s taxation strategy aims to compensate for losses attributed to the growth of the informal sector, where businesses often evade the high operational costs associated with formal registration. The government regards the mining sector—primarily earning revenue in foreign currency—as crucial for addressing its revenue shortfalls. Despite these obstacles, the CoMZ chief executive highlighted that miners are engaged in negotiations with the government to find mutually beneficial solutions.

In conclusion, the Zimbabwean mining sector is gearing up for significant growth, primarily driven by expansion projects and anticipated international price increases. While facing higher taxes and financing costs, the industry remains optimistic about achieving a 7% growth rate amid negotiations with the government. With projected increases in gold, platinum, and diamond production, the sector plays a vital role in stabilizing the country’s revenue crisis.

Original Source: africanminingmarket.com