Mining remains firm as 7,7% growth expected in 2021

18 Oct, 2020 - 00:10 0 Views
Mining remains firm as 7,7% growth expected in 2021 Minister Professor Mthuli Ncube

The Sunday News

Nkosilathi Sibanda, Business Correspondent
THE local mining industry is predicted to spur economic growth by 7,7 percent next year as the Government anticipates high demand for minerals as global markets open up to offset shocks after stringent Covid-19 lockdowns.

In a forecast for the coming year, mining sector growth is to be guided by eight key measures set out by the Ministry of Finance and Economic Development. The soon to be amended Mines and Minerals Act is the first measure that the Government earmarked before year end, according to the recently presented 2021 Budget Strategy Paper (BSP).

The (BSP), as said by the Ministry, is in line with the New Dispensation’s commitment to ensure stakeholder involvement in policy formulation processes. Running on the theme “Building Resilience and Economic Recovery Post Covid-19” the BSP is premised on firming up the economy to withstand any potential climatic and macro-economic shocks.

Value addition, beneficiation, upgrade of the cadastre system, environment sustainability, investment and exploration, reopening of disused mines, taxation and plugging of leakages were the measures that were seen as crucial to the sector.

Finance and Economic Development Minister Professor Mthuli Ncube said after contracting this year, the mining sector was set to rebound.

“The sector is expected to grow by 7,7 percent in 2021 from a projected contraction of 4,1 percent in 2020,” he said.

Prof Ncube said the rebound in the sector was anchored on the Platinum Group of Metals (PMG). PGM minerals include rhodium, palladium, ruthenium, osmium, iridium, and platinum. According to mining experts, these minerals occur in the same mineral deposits.

“Recovery will be driven by almost all minerals including gold, PGMs and diamond. The sector is expected to benefit from relatively higher prices of gold and PGMs.”

Other minerals were also on the high end as statistics from the Ministry show that by last May, prices firmed up. Gold prices reached a high of US$1 732,22, while nickel recovered from US$11 804 per tonne in March to US$12 727 per tonne by May 2020.

Professor Ncube said if this was to be a reality, the eight measures for growth were the answer.

“Attainment of the target will entail increased investment in the exploration, extraction, value addition and beneficiation across all minerals.

The Government in partnership with the private sector has already started to walk the journey in this respect,” he said.

With regard to the Mines and Minerals Act, whose amendment was a point of discussion this year, Professor Ncube said the law will heighten investor confidence.

“The Government will prioritise finalising amending of the Mines and Minerals Act which is expected to bring a market based conducive investment climate providing the stability, consistency, competitiveness and transparency in the sector.”

Mining is the country’s top foreign currency earner.

“Value addition is expected to help the country to generate the much-needed foreign currency,” Prof Ncube said.

In an interview on Friday on the BSP, an economic analyst Dr Gift Mugano said robust transformation systems have to be in place.

Dr Gift Mugano

“In the mining sector, there is a need for value addition to deal with the global decline of metal commodities prices, which will therefore create vast employment up and downstream. There also has to be a robust and transparent system to promote value addition, which will therefore guide investors because they will be evidence,” he said.

Globally, the trend with most metal commodity markets is shifting to value addition and beneficiation. The gold mining sector, where a number of artisanal and small-scale miners operate, will be happy with plans to plug leakages that have been a common feature. Prof Ncube said the Government will maintain the gold retention scheme, review the Gold Trade Act and capacitate the gold mobilisation and border control units.

“To eliminate leakages, the Government will continue to review gold marketing conditions and capacitate law enforcement institutions. The country is losing millions in exports proceeds through mineral smuggling especially gold through porous border posts and illegal crossings,” he said.

A small-scale miner in the gold rich Bubi district belt, Mr Shorayi Gumbo said if the Minister was to avail marketing channels for the mineral, the sector would achieve the expected growth.

“It is a matter of commitment on the part of the Government because miners are ready to work for economic growth. What we need is capacitation and exposure to markets,” said Mr Gumbo.

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