By Ndafadza Madanha
THE mining sector requires a staggering US$11 billion to carry out new projects, bolster production and reopen closed mines.
Since ushering of the new dispensation several international and local investors have expressed interest in investing in the lucrative but capital intensive sector.
According to Zimbabwe Chamber of Mines chief executive Issac Kwesu the needs of the sector have grown from US$5b estimated in January to the current US$11b owing to the growing interest shown by investors and deals inked.
He said the bulk of the money required will be channeled towards platinum mining projects.
“Mining capital is scarce and we require about US$11b and in January we spoke of about US$5b but things have changed owing to the continued interest investors are showing in the sector. Much of the money about US$7b will go towards the platinum projects and value chain. To use to able to unlock value in the mining sector capital is the missing link,” said Kwesu.
He said other sub sectors require substantial funding with gold needing US$900m, US$700m for Iron Ore, US$500m for chrome and US$400m for coal.
Government has in recent months signed multi -billion dollar deals for mining projects. Among them is the US$4B platinum deal with Karo resources.
Most recently a US$1B deal was penned with Chinese Tshingshan firm for the setting up of a stainless steel plant.
Kwesu said the country needed to continue making investments in infrastructure projects particularly in the energy and rail sectors as they strongly support mining development.
He said without these developments the high cost prevailing would continue to hamper the competiveness of the sector and its ability to attract fresh capital.
“Energy is another key in mining as we are currently taking 23% of the power grid and that is going to grow further, the rail network will have to be looked into also if we are to reduce the high cost structure in the sector. We sell our commodities on the international market and returns for investors locally are lower than those from South Africa because of the cost structures”.
He said despite mining accounting for the largest chunk of foreign currency receipts the sector was struggling to access foreign currency to meet some their requirements.
Kwesu said once the challenges in the sector are resolved the mining sector had the ability to treble and quadruple production in various sub sectors within the next 12 years.