ALEX MHEMBERE PRESIDENT CHAMBER OF MINES OF ZIMBABWE THE CHAMBER OF MINES OF ZIMBABWE.
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Transcript of ALEX MHEMBERE PRESIDENT CHAMBER OF MINES OF ZIMBABWE THE CHAMBER OF MINES OF ZIMBABWE.
Overview of Zimbabwe’s Mining Sector
ALEX MHEMBERE
PRESIDENT
CHAMBER OF MINES OF ZIMBABWE
THE CHAMBER OF MINES
OF ZIMBABWE
Presentation Outline
• Zimbabwe’s mineral resources
• Contribution of the mining sector to Zimbabwe’s economy:
Where have we come from?Where are we now?
• Where to for Zimbabwe? Mining as the cornerstone for economic growth
• Conclusion
Mining Sector Overview
THE CHAMBER OF MINES
OF ZIMBABWE
“The mining sector will be the centrepiece of our economic recovery and growth. It should generate growth spurts across sectors, reignite that economic miracle which must now happen…we need to explore new deposits, developing new greenfield projects in the mining sector. Above all, we need to move purposefully towards beneficiation of our raw minerals.” President R.G. Mugabe inauguration speech
4
Importance of the Mining Sector
• More than 40 different minerals
• Diverse mining sector
• +800 operating mines
• Ranging from artisanal and small scale mines to world class mines
5
Structure of the Sector
Contribution of the Mining Sector to Zimbabwe: Where have we come from?
THE CHAMBER OF MINES
OF ZIMBABWE
• The mining sector has to date been the most dynamic sector of the Zimbabwean economy, leading the 2009-2011 rebound with average annualised growth of 35%.
Aug 2013 7
Mining, the Driver of Economic Growth
Value of Mineral Exports
1980 1990 1996 2000 2005 2006 2007 2008 2009 2010 2011 20120
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Value of mineral exports (1980- 2012)
mining exports (USD million) national exports (USD million)
Positive correlation between export growth and mineral export growth
Contribution to Total Mineral
Exports
1993-2003 (%) 2004-2011 (%) 2012 (%)
Gold 57.3 24.2 26.9%
HCF 20 10.7 8.6%
Nickel 15.1 11.0 0.7
PGMS* 2.3 46.1 27.2%
Diamonds 0.8 6.7 26.1%
Others 6.8% 1.3% 10.5%
9
RBZ, MOF, Zimstats
Exports by Category
10
Gold Price vs. Zimbabwe Production
2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.0
5000.0
10000.0
15000.0
20000.0
25000.0
Zimbabwe Gold Output (kg)
Output (kg)
2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
500
1000
1500
2000
Gold Price (USD/oz)
Avge Global Price (USD/oz)
USD
11
Nickel Price vs. Zimbabwe Production
2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.0
2,000.0
4,000.0
6,000.0
8,000.0
10,000.0
12,000.0
Zimbabwe Nickel Output (t)
Zimbabwe Output (t)
2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
500010000150002000025000300003500040000
Nickel Price (USD/t)
Average Global Price (USD/t)
USD
12
Coal Price vs. Zimbabwe Production
2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
1020304050607080
Coal Price (USD/t)
Average Global Price (USD/t)
USD
2003 2004 2005 2006 2007 2008 2009 2010 2011 20120
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
Zimbabwe Coal Output (t)
Zimbabwe Output (t)
Contribution of the Mining Sector to Zimbabwe: Where are we now?
THE CHAMBER OF MINES
OF ZIMBABWE
14
Mineral 2012 Actual
2013 Jan-June
Actual
2013Projection
Gold (kgs) 14,742 6,727.36 17,000Coal (tons) 1,784,763 955,086.00 2,000,000
Nickel (metric tons) 7,899 4,887.33 10,000
Platinum (kgs) 10,524 6,599.49 12,500
Chrome Ore (tons) 408,475 92,073 282,000
Palladium (kgs) 8,136 5,068.54 10,000
Diamonds (tons) 12,014,802 - 16,900,000
Source: Ministry of Mines, Chamber of Mines
• Mineral output for 2013 expected to surpass 2012 production
Mineral Output Performance
Aug 2013 15
1995 1996 1997 1998 1999 2009 2010 2011 2012 2013f 2014f 2015f
4.30%3.80% 3.70% 4.00% 3.90%
8.00%
12.00%
13.00%
15.00%15.70%
16.90%
17.80%
Mining Contribution to GDP (1995-2015)
GDP Contribution
Aug 2013 16
Direct Tax Contribution
2009 2010 2011 2012
57,800,000
167,523,764
387,300,000
445,000,000.00
Total Tax Paid Directly by Mining sector to government ($)
People Employed in the Sector
Aug 2013 17
1990 1995 2000 2004 2006 2007 2008 2009 2010 2011 20120
10000
20000
30000
40000
50000
60000
70000
51000
59000
45000
39000 38516 37971 38616
33289
45918 45200 45800
Employment in the Mining Sector
• Contribution of mining companies goes beyond paying taxes• Towns and cities have been built around mines (e.g.Bindura,
Hwange, Kwekwe and Zvishavane)• New local enterprises have been developed through linkages to
mining operations• Schools and hospitals have been established by mines
July 2013 18
Corporate Citizenship of Mining Companies
• Sports teams have been established by mining companies (e.g. Hwange FC, FC Platinum)
Where to for Zimbabwe? Making Mining the Cornerstone of Economic Growth
THE CHAMBER OF MINES
OF ZIMBABWE
With the new thrust of mining as the cornerstone of economic growth, it’s imperative to:
1. Resuscitate existing mining operations
2. Develop new mines
3. Beneficiate mineral output
4. Establish linkages between the mining sector and other sectors of the economy, particularly manufacturing
Making Mining the Cornerstone of Economic Growth
Gold Production (kg), 1980-2012
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110
5000
10000
15000
20000
25000
30000
Source: COMZ 2012 and RMG 2012
Resuscitation of Existing Mines
Resuscitation of Existing Mines
Coal Production (tonnes), 1980-2012
Resuscitation of Existing Mines
Nickel Production (tonnes), 1990-2012
Resuscitation of Existing Mines
25
- Capital - Knowledge - Innovation
Feasibility Studies• Exploration & evaluation• Design, planning & costing
Shaft sinking• Drill, blast, clean, support• Equip
Development• Footwall off-reef and on-reef• Drill, blast, clean, support
Stoping• Drill, blast, clean, support• Underground rail transport
Transport• Shaft hoisting• Surface rail transport
Concentrator• Mill• Flotation
Smelter• Drying, smelting• Converting
RefineriesRequired
for all Stages
Development of New Mines
The Chamber of Mines is in full support of the Government’s call for beneficiation of mineral output
1. Down-stream beneficiation - Downstream value addition involves a range of activities including large-scale capital-intensive activities such as smelting and refining as well as labour-intensive activities such as craft jewellery and metal fabrication.
• Mining beneficiation – capabilities of the mining company in the areas of smelting or concentration
• Manufacturing beneficiation – when manufacturing companies have capabilities to produce a final consumer product
2. Side-stream beneficiation - Refers to inputs, namely capital goods, consumable and services, into the value chain
Supported by mining companies in Zimbabwe as well as policy makers
To a large extent, mineral beneficiation is already taking place in the country
Beneficiation
There will be a picture of the mine here
Manufacturing beneficiation took place with the manufacture of asbestos cement products
Between 1965 and 1978 asbestos was the country's principal mineral in terms of the value of output
Production peaked in 1974 at 281kt. 2012 production was 29.5tonnes.
Shabanie and Mashaba Mines have been operating below capacity
Asbestos Beneficiation
Beneficiation in chromite mining has been taking place through the production of ferrochrome
Production: 2012 production was 31.82% down on the previous year at 408,475.81 tons.
Most of the smaller smelters remained under care and maintenance during 2012, with ZIMASCO being the only smelting facility operating
Chromite Beneficiation
There will be a picture of the mine here
Mining beneficiation is taking place with the use of coal in power stations
Most potential in the sector has remained under-utilised
Production averaged over 5mt/yr in the 1990s but fell to 1.9mt in 2009 before recovering to 2.8mt in 2010 and 4.6mt in 2011
Hwange Colliery Company continues to be the largest coal producer with additional production coming from Makomo Resources and Galpex.
Coal Beneficiation
Mining beneficiation for gold mining has been taking place through Fidelity Refiniries
Production has rapidly recovered to 14.7tons in 2012 compared to 3.6 tons in 2008 since adoption of the multi-currency system in 2009, production
Artisanal and small scale miners play a large role contributing to gold output
Gold Beneficiation
There will be a picture of the mine here
Mining and manufacturing beneficiation used to take place for iron ore mined at Ripple Creek and Steel produced in Redcliff
Production peaked in 1992 at 1.46 Mt, and then fell to zero in 2008
Iron and Steel Beneficiation
There will be a picture of the mine here
Mining beneficiation took place at the Bindura Smelter and Refinery complex
Bindura Nickel Corporation, the primary producer for nickel placed its smelter and refineries on care and maintanence in 2008
For the past 4 years, most nickel production has been from platinum mining operations as a byproduct.
Production: Peaked in 1994 at just over 13,000 tonnes
Nickel Beneficiation
Three operating mines in Zimbabwe; - 2 producing concentrate- 1 producing matte after smelting
Potential exists for further beneficiation and work is already in progress in this regard
Platinum Beneficiation
• It’s critical that linkages with other sectors are created, especially manufacturing
• Zimbabwe’s manufacturing sector has been hamstrung over the past 15 years, therefore capacity for manufacturing beneficiation is limited
Building Linkages
Leat
her a
nd A
llied
Gra
in M
illers
Car A
ssem
blers
Paints
and
Inks
Textile
s an
d Clot
hing
Engine
ering
Iron
and
Ste
el
Baker
s
Chem
ical
Electri
c App
lianc
es M
anuf
actu
rers
Plastic
, Pac
kagin
g an
d Rub
ber
Timbe
r Pro
cess
ors
Pharm
aceu
ticals
Food,
Dair
y an
d Bev
erag
es
Paper
, Prin
ting
and
publi
shing
Buildin
g (c
onst
ruct
ion a
nd re
lated
)
Batte
ry M
anuf
actu
re0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
2012 Capacity Utilisation in Zimbabwe Manufactur-ing
Level of utlisation
Source: CZI State of Manufacturing Survey,
Capacity Utilisation in Zimbabwe Manufacturing
Case Study: Building Linkages
July 2013 36
Prospects for the Mining Industry
THE CHAMBER OF MINES
OF ZIMBABWE
Despite constraints, the sector is poised for marked growth in the next 5 years with World Bank (2012) forecasting positive outlook under two scenarios:
1. Base Case ( current policies and costs)• Gross revenues and fiscal revenues of the mining sector to increase by
63 and 87 percent in 2018, respectively, to $4.8 billion and $729 million.
2. Optimistic Case ( assumes investment capital of around $5 billion and optimal policies)• Gross revenues and fiscal revenues of the mining sector to increase by
274 percent and 307 percent in 2018, respectively, compared to 2011.• The increase in gross revenues and fiscal revenues compared to the
base case projections for 2018 are 130 percent and 118 percent, respectively
Future Prospects for the Mining Industry
Conclusion
THE CHAMBER OF MINES
OF ZIMBABWE
- Zimbabwe is endowed with abundant mineral resources- indeed mining can become the cornerstone of an economic turnaround- We need to resuscitate existing mines on care and maintenance to pre-
1998 levels- We need to invest in exploration and new mining development- We need to focus on value addition and beneficiation- We need to focus on linkages
To achieve this, we need to address the following issues:- A common national vision- Policy consistency. Mining Policy in progress. To now focus on
economic & Industrial Policies. - Competitive fiscal regime - We need to attract investment to the sector - Improve critical infrastructure, i.e. electricity, roads and water supply
Conclusion
ENDSThis presentation based on personal views of presenter and does not necessarily represent the views of the Chamber of Mines of Zimbabwe or any other person or
organization
THE CHAMBER OF MINES
OF ZIMBABWE