Home » News » POLICY CHANGES TO SPUR MINING SECTOR GROWTH IN ZIMBABWE, SAYS AFDB

HARARE, May 28 — Structural and policy changes being introduced in the mining sector in Zimbabwe will likely spur it to rebound strongly in the medium term, says the African Development Bank (AfDB).

Some of the changes that the Zimbabwe government has initiated include merging diamond mining companies into one in which the government will have a 50 per cent shareholding.

The mining sector in Zimbabwe, which is central to the government’s efforts to turn around the economy, has been under-performing because of challenges such as power shortages, weak international commodity prices and limited capital investment. Power shortages alone are said to be cutting production by up to 10 per cent.

In its 2015 African Economic Outlook report released at the bank’s annual general meeting now underway in Cote d’Ivoire, the AfDB said the changes being introduced would impact positively on the mining sector.

“However, notwithstanding the softening of commodity prices, the mining sector is expected to rebound in the medium term. This is due to the planned completion of the merger and consolidation exercise in the diamond sector, as well as finalization of the amendments to the Mines and Minerals Act and the new mining fiscal regime,” it said.

The AfDB added that it was important to bring finality to the process of amending the Mines and Minerals Act.
“Once enacted, the Bill will modernize the legislation and make it consistent with international best practices, in line with the authorities’ commitment to reforming the mining sector.”

Between 2009 and 2012, the mining sector grew by an average of 35 per cent but since then, growth has slackened. The mining sector has the potential to make a significant contribution to economic growth over the medium to long-term as Zimbabwe is endowed with various minerals ranging from diamonds, chrome, iron ore and gold, the AfDB noted.

About 40 minerals out of a known 60 are being mined in Zimbabwe.

SOURCE: NEW ZIANA

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