Zimbabwe needs $11 billion to renovate its mines over the next five years

Zimbabwe mines needs almost $11 billion for renovations that will help maximize capacity for increased production over the next five years.

The head of the country’s Chamber of Mines, Batirai Manhando in an annual meeting of the mining chamber on Friday, said, “The local mining industry is currently operating below capacity on the back of capital shortages.”

“At the beginning of the year the capital intensive industry required $7 billion for both ramp-up and sustenance capital. The figure has lately been revised upwards to $11 billion with renewed interest in our sector,” Manhando added.

Going further to highlight the unfitting state of some of the country’s mines, the Chamber of Mines president said asides platinum producers, all other mines, including those of gold, nickel, cobalt and coal were operating below their installed capacity. He added that equipment at most mines was more than 50 years old, severely undermining efficiency and cost effectiveness of the sector.

Keen to revive the mining sector after years of reticence by foreign investors during Robert Mugabe’s rule, President Emmerson Mnangagwa has been able to boost foreign investors interest in the southern African nation. However, projects are still constrained by lack of funding, Reuters reported.

Mining companies in Zimbabwe faced problems that included high costs of electricity, labour and royalty fees, asides the presence of  little exploration in the country since 2000, Manhando said.

Like other southern African countries, Zimbabwean soil is rich in raw materials, namely platinum, coal, iron ore, and gold. Also lately, diamonds have been found in considerable deposits. Copper, chromite and nickel deposits also exist, though in lesser amounts. The Marange diamond fields, discovered in 2006, are thought to be among the richest in the world.

In March, a Cypriot investor signed a $4.2 billion deal to develop a platinum mine and refinery in Zimbabwe. President Emmerson Mnangagwa said  the investment showed that the country was “open for business”.

“Zimbabwe is open for business and whoever stands in the way, hurting business in this country, will fall. It is not business as usual anymore, things have to change,” Mnangagwa said at the signing ceremony.

The country’s mining contributes more than half of Zimbabwe’s export receipt. Last year, it earned $2.8 billion from the industry. The government is expected to announce a new “mining vision” at the end of June, Mines Minister Winston Chitando said.