Investment, growth of Zim’s mine sector dominate indaba

THE BIG mining issue in Zimbabwe at the moment is mineral beneficiation, but mining executives and government officials initially skirted around this topic when they came face to face at an industry indaba in Harare last week.

The government said the 15 percent levy on raw platinum exports would stay until producers of the precious metal made concrete efforts towards building refinery facilities in the country.

Alex Mhembere, the chamber of mines president, said that the beneficiation facilities would be launched by June next year.

Away from the beneficiation issue, experts and executives dwelt on the need to create a conducive framework for investment and the growth of the mining sector.

“It’s delicate and there is pressure on both sides. It has become a sensitive issue as there is no agreement at all between the miners and the government – mining executives are being very cautious in their statements on the issue,” one mining industry source said.

Government officials are apparently sticking to their guns, insisting that the government is not realising much from the extraction of the country’s mineral wealth.

“There is money at the mines. You often complain of taxes and levies pushing you down to break even, but why (aren’t) those companies that are at break even and not profitable still in business and not closing down,” Fortune Charumbira, the president of the chiefs’ council in Zimbabwe, said.

Winston Chitando, the executive chairman of Mimosa mine, said his operation had paid more than 35 percent of its expenditure for the year to June 2014 to the government in the form of taxes and levies.

You often complain of taxes pushing you down to break even. But why are those firms still in business?

Any direct and sudden “change in revenues will inevitably have an effect” on the breakeven status of mining companies.

Mhembere said there was a need for the government to work on “enabling policies” and the fiscal framework.

An expert from Deloitte Zimbabwe said there was a growing need for “investment in exploration, core infrastructure and the recapitalisation” of non-operating mines.