Pro­duc­tion up in Zim’s coal and di­a­mond min­ing

The Star Early Edition - - COMPANIES/ANALYSIS - Tawanda Karombo

ZIM­BABWE’S Con­sol­i­dated Di­a­mond Com­pany (ZCDC) and the coun­try’s state-con­trolled coal miner, Hwange Col­liery, have raised pro­duc­tion in the first half of the cur­rent year and it is ex­pected that this will drive the min­ing sec­tor to a 5.1 per­cent growth this year amid de­mands for more rev­enue from the in­dus­try by the gov­ern­ment.

All al­lu­vial di­a­mond min­ing com­pa­nies in the Chi­adzwa area have been merged un­der the ZCDC, with the state now own­ing half of the shares in the con­sol­i­dated com­pany.

There was ear­lier re­sis­tance by Zim­bab­wean di­a­mond min­ing com­pa­nies to the con­sol­i­da­tion process and this had stalled gem min­ing in the coun­try.

How­ever, Fi­nance Min­is­ter Patrick Chi­na­masa said the con­sol­i­da­tion process had en­abled greater trans­parency in di­a­mond min­ing and the ZCDC had now moved to full start op­er­a­tions, with out­put for the first half of 2017 go­ing up to 1.1 mil­lion carats.

The other di­a­mond op­er­a­tions in Zim­babwe in­clude Murowa, from which Rio Tinto has since ex­ited af­ter dis­pos­ing of its in­ter­ests to its for­mer part­ner in the op­er­a­tion, Rio Zim.

“With the cap­i­tal­i­sa­tion of the ZCDC, di­a­mond out­put dur­ing the first half of 2017 was 1.1 mil­lion carats against 690 000 carats pro­duced dur­ing the pre­vi­ous year,” Chi­na­masa said last week.

The gov­ern­ment has pre­vi­ously said that it has taken over all earn­ings from di­a­mond min­ing in the coun­try.

In the pe­riod Jan­uary to May 12, 2017, Zim­babwe’s earn­ings from di­a­monds plunged to $27 mil­lion (R348.32m), com­pared with $51m in the pre­vi­ous con­trast­ing pe­riod, ac­cord­ing to fig­ures pro­vided by the Zim­babwe cham­ber of mines.

Plat­inum ex­port earn­ings by South African plat­inum min­ing groups such as An­glo Plat­inum, Im­pala Plat­inum and Sibanye Re­sources, which have units op­er­at­ing in Zim­babwe surged to $333.5m, sig­nif­i­cantly up from the $282m recorded for the same pe­riod in 2016.

Chi­na­masa said the min­ing sec­tor was ex­pected to grow by 5.1 per­cent and help pro­pel Zim­babwe’s gross do­mes­tic prod­uct growth to 3.7 per­cent this year.

The growth in min­ing is ex­pected to come from in­creased out­put by gold, plat­inum, chrome, coal and nickel com­pa­nies

“The on­go­ing re­forms in di­a­monds and the coal in­dus­try are al­ready see­ing the turn-around of these sub-sec­tors, pro­vid­ing im­pe­tus for higher growth of min­ing,” said Chi­na­masa.

Zim­babwe has taken mea­sures to turn around the for­tunes of Hwange Col­liery, which has been suf­fer­ing from debts and from poor equip­ment avail­abil­ity.

Makomo Re­sources, an­other pri­vate coal miner in Zim­babwe, has also con­trib­uted sig­nif­i­cantly to coal min­ing out­put in the coun­try.

As a re­sult, “coal out­put is also on the in­crease fol­low­ing im­ple­men­ta­tion of turn­around strate­gies” at Hwange Col­liery. Pro­duc­tion from Hwange has jumped from 30 000 tons to 150 000 tons per month.

Al­though min­ing com­pa­nies have been rais­ing pro­duc­tion, the cham­ber of mines of Zim­babwe says min­ing com­pa­nies are bat­tling against de­layed pay­ments for im­ported equip­ment and other raw ma­te­ri­als. The gov­ern­ment is also de­mand­ing that they con­trib­ute more to state cof­fers that are starved of rev­enue flows.

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