ZIMBABWE’S mineral revenues are likely to drop by 4% to US$5 billion this year due to weak commodity prices among other challenges, Chamber of Mines Zimbabwe (CoMZ) president Thomas Gono said Thursday.
The sector generated US$5,2 billion last year.
“In the outlook for 2024, mineral output is expected to grow by a weighted average of around 7,6%, as mining companies ramp up production to compensate for revenue losses arising from low commodity prices,” he said while delivering his opening remarks at the CoMZ 2024 annual conference in Victoria Falls on Thursday.
“These mineral revenues are, however, expected to decline to around US$5 billion on account of further softening of commodity prices. We believe the increase in production will not compensate for the declines in prices.
“Risks to the mining sector outlook include fragile power supply, capital constraints, foreign currency shortfalls, loss of value on the surrender portion of export proceeds and high cost of production. Our mining industry remained a key pillar in the economy.”
The mining sector’s capacity utilisation is expected to increase by six percentage points to 90% this year, driven by gold, ferrochrome, and coal.
The sector recorded 84% capacity utilisation in 2023, driven by gold, ferrochrome and platinum group metals.
Factors that constrained full capacity utilisation included electricity outages, inadequate foreign exchange allocations, loss of value on the surrendered portion of export revenues, capital shortages and high operating cost structure.
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Gold output declined by 14% to 31,965 tonnes in 2023, with the drop attributed to viability challenges induced by rising costs and power shortages.
Platinum, palladium, and iridium production in 2023 was at the same levels as in 2022 with declines in production recorded for rhodium (-4%) and ruthenium (-13%) over the same period.
The CoMZ president said primary nickel production was facing challenges, and the only primary nickel producer is now under judicial management in an effort to rescue the operation.
Primary nickel production only contributed 16% to total nickel production as the mine operated from January to September 2023. Nickel production however grew by 1,4% in 2023 to 14 465 tonnes.
Despite this decline in performance, the sector accounted for approximately 78% of national exports in 2023, maintaining its position as the largest foreign currency earner in the country.
The mining industry continues to be a significant contributor to employment having employed more than 53 000 formal jobs and over 500 000 artisanal and small-scale miners.
