What are the Challenges of Mining Industry in Zimbabwe?

Mineral resources of Zimbabwe

The Republic of Zimbabwe is a landlocked country in southern Africa, between the Zambezi and Limpopo rivers, south to South Africa, west and southwest to Botswana, northwest to Zambia,  east and northeast to Mozambique. There is no territory to border between Zimbabwe and Namibia, but they are Neighbours separated by Zambezi River, the distance is about 200m. Zimbabwe was founded on April 18, 1980, there is an area of 390,000 square kilometers, The largest city and capital is Harare.

As a major mineral country, Zimbabwe has invaluable mineral resources. It is an important producer of gold, chromium, platinum, copper, coal and other minerals in the world. Currently, there are many kinds of minerals that have been commercialized, which has become the largest industry that contributes to Zimbabwe’s exports.

Gold mines-----Zimbabwe is the second gold producing country after Brazil and Ghana in Africa. According to the statistics of the Zimbabwe Geological Survey, Zimbabwe has a gold reserve of 1,300 tons and an annual gold production of about 20 tons. Gold is the most important mineral in Zimbabwe and the most important export products.

Chromium ore-----Zimbabwe's chrome ore is densely packed, with excellent quality and high chromium content. It is the best raw material for smelting high carbon ferrochrome. Zimbabwe generally does not directly export chrome ore, but smelts chrome ore into ferrochrome, iron-silicon chrome, and rechargeable chromium and Other alloy to increase the added value.

Platinum Group Mineral Deposits-----Zimbabwe has the second largest platinum group metal resource in the world after South Africa. It is mainly produced in the middle and south sections of the Zimbabwe Great Rock Wall. The reserves of proven platinum group element ore base reach 2.8 billion tons. The average grade of platinum group elements is 3.33 g/ton, and the amount of platinum group element metal is 8923.36 tons.

Copper Mine-----Zimbabwe has proven reserves of 5.2 million tons of copper metal, mainly in the northeastern Makonde Basin, Mhangura, Avondale, Chinoyi and Hedland. In these places such as Headlands, graphite, lead, zinc and silver are also associated with other minerals in the area.

Coal Mines-----Zimbabwe is the second largest coal producer after South Africa in the African continent. It has abundant coal resources and proven coal base reserves up to 27 billion tons.

The mining industry has driven Zimbabwe’s economic development

The mining industry plays a very important role in Zimbabwe's national economy, accounting for 7% of Zimbabwe's GDP, and 40% of its foreign exchange earnings come from exports of metals and ore. There are more than 400 existing mines and more than 1,000 pits, which produce over 35 kinds of mineral products, and the number of employed people is 45,000. Most of these mines are small, Mineral products include asbestos, chromite, copper, diamond, gold, nickel, coal, iron ore, ferroalloy, steel, tin and so on. So the southern African governments regard the rapid development of Zimbabwe’s national economy as “the dawn of southern Africa”.

The development of the mining industry is indispensable, and it plays a vital role in the way to Zimbabwe’s economic recovery. Prime Minister Mugabe’s policy of “denationalization” has attracted a large amount of foreign investment. The Zimbabwean government welcomes foreign companies to invest in Zimbabwe’s mining industries. All areas of Zimbabwe are open to foreign investors. The mining industry is one of Zimbabwe's main economic sectors, controlled by foreign monopoly capital such as the United Kingdom, South Africa and the United States. Eighty-five percent of Zimbabwe’s gold production is produced by 20 major mines, the two of which are the Lenco mines belonging to Rio-Tinto Mining Co., Ltd. and the Dalni mine belonging to Falcon. Britain's Turner - Newark's asbestos mining in Sabani and Masaba accounts for 90% of Zimbabwe's total asbestos production. Anglo-American company has two large melting furnaces in the Luoerda plant , Gyula. It can refine 23,000 tons of low-carbon ferrochrome, 36,000 tons of ferrochrome, and 50,000 tons of high-carbon ferrochrome which control the production of zinc in Zimbabwe. The production of nickel is mainly controlled by Anglo American, Rio-Tinto and United Carbonization, and coal is mainly mined by the British-based Rhodesia Anglo-American company. The government changed the previous government’s stipulation that foreign companies in Zimbabwe’s subsidiaries would not remit profits, allowing foreign companies to remit half of their profits after tax payments, and provided various conveniences and concessions for geological exploration of foreign companies, encouraging them to develop Mining production , makes them both safe and profitable.

The fuel shortage crisis

Zimbabwe’s great achievements in the past few years have attracted the attention of all countries in the world. However, due to the influence of the domestic political and economic situation, Zimbabwe’s mining industry has continued to decline in recent years, Local oil companies in Zimbabwe do not have enough income to pay for imported fuel, which may cause a fuel crisis.

In the case of an extreme shortage of fuel, the Zimbabwean government announced a sharp increase in fuel prices and started to inplement it. The government has increased more than doubled fuel prices, the diesel and gas prices have more than doubled increased at $3.11 and $3.31 per liter. The main reason for the price increase is that the shortage of currency has reduced the government's ability to import fuel, resulting in a significant reduction in domestic supply.

The Zimbabwe fuel demonstration broke out on January 14, 2019, because the Zimbabwe South Gagowa government proposed a fuel price increase of 130% on the same day. Thousands of demonstrators on the streets protest against rising fuel prices, growing domestic poverty, a sluggish national economy, and constantly falling of the living standards. The government organizes the clearance operation, causing hundreds of people to be arrested and several deaths. The three-day demonstration basically ended on January 17, and the store gradually resumed operations. It turns out that at this critical stage, Zimbabwe needs production, not demonstrations.

The measures taken by the government

Faced with the problem of fuel shortage, the Zimbabwean government has appeased the civilian not to be panic. The previous problem was that various oil companies paid for imported fuel through banks, but some banks had problems with payment bottlenecks after submitting applications to the central bank. The bank was told that there was not enough foreign exchange to pay, which mainly involves the shortage of the dollar, the central bank is raising foreign exchange payment for imports.

The Zimbabwean government is using all resources to enable the central bank to raise funds for imported fuel and to avoid further deterioration of the fuel shortage. The public has begun to use the credit card transaction to buy fuel, but there is not enough export revenue to pay for imported fuel costs, so the fuel supply of some gas stations in recent weeks is unstable.

Fuel shortages have been affecting Zimbabwe’s economy and are now a threat to the mining industry, so small-scale mining companies are strongly demanding that the government take steps to solve the problem of fuel shortages. The mining industry is Zimbabwe's largest source of foreign exchange earnings, dominated by gold exports.

In order to meet Zimbabwe's demand for fuel, the government should  increase the foreign exchange income with the gold mine as the leading factor. Utilizing favorable policies, taking effective measures and using HXJQ mining equipment to replace the original labor, greatly improving production efficiency, thus promoting the development of mining in Zimbabwe.