ZIMBABWE’S major mining companies are pinning their hopes on Treasury to announce a cocktail of measures to cushion platinum group metal producers from the tumbling prices on the international market and rising operating costs, The NewsHawks has established.
BERNARD MPOFU
Early this year, the country’s major platinum miners — Zimplats and Mimosa — announced job cuts after warning that the current business environment was adversely affecting their operations.
Zimbabwe has the third-largest known platinum reserves in the world after South Africa and Russia.
The mineral is mainly used for manufacturing catalytic converters in the automotive industry. The devices are vital in reducing carbon emissions.
Chamber of Mines of Zimbabwe president Thomas Gono told The NewsHawks that miners are optimistic that the mid-term fiscal statement will help miners weather the storm.
“We are currently engaging government so that we see areas which are pertinent with regards to incentivising so that the industry remains sustainable,” Gono said.
“We anticipate now we are having the mid-term review of the budget and programmes of the government, I think this is an opportune time where all these things are going to be reviewed.”
Isaac Kwesu CoMZ chief executive officer while miners have embarked on several internal measures, tweaking the current fiscal policy regime is critical.
“Internally producers have done all they could do to reduce costs and save mines and make sure that the mines are not under care and maintenance, minimize costs and improve efficiency,” Kwesu told The NewsHawks.
“They have also tried to increase output to extent to also cover the gap that they have lost in terms of price. It was also not enough, now they have to seek external support specifically from government—reduction is fiscal charges where possible, reduction in tariff for power among other things. So we are engaging government on that front.”
Last year, Zimbabwe’s large-scale mining companies painted a gloomy picture of the economic outlook as business confidence waned due to an unfavourable operating environment and depressed commodity prices.
Ahead of the 2024 National Budget, miners implored the government to reduce energy tariffs and royalties, citing softening commodity prices.
They said in the 12 months to November, the sector witnessed the weakening of prices for most key minerals, with rhodium (-74%); lithium (-69%); palladium (-41%); diamond (-60%); and nickel (-8%) the worst affected.
The authorities were unrelenting. Royalties which were raised to 7% last year from 2.5% in the previous year were maintained and effects of a 5% beneficiation tax were felt across the platinum sector.
