THE country’s mining sector is bullish about prospects for 2021 with production of major minerals expected to go up by between three and 33 percent, riding on a variety of factors including a positive commodity market outlook, the Chamber of Mines said on Wednesday.
According to the Mining Business Confidence, industry executives are optimistic about next year more than they were about this year, with the sector expecting capacity utilisation to surge to 80 percent from 61 percent this year.
“Notable variables that contributed to improvement in the Mining Business Confidence Index include mining sector growth prospects, profitability prospects and commodity market outlook,” the Chamber said.
Chrome production, at 33 percent to 1.6 million metric tons, is expected to record the highest rise in production next year, followed by gold at 32 percent to 33 000 kg, coal and diamonds at 25 and 19 percent increases respectively.
Palladium, platinum and nickel are expected to record single digit growth of between three and five percent.
Zimbabwe has set a target for its mining industry to more than double its performance to become a US$12 billion industry by 2023.
The Chamber said mining executives, however, say lack of access and cost to capital, the investment environment which they deem uncompetitive, and policy environment, which they say is uncertain, the power situation as well as high country risk, are major factors that will likely dampen the sectors performance.
“Survey findings show that mining executives are worried about policy inconsistencies, which characterized the operating environment in 2020 to persist in 2021, impacting negatively on business planning,” it said.
However, with improved access to capital, the sector expects production to jump to as high as 92 percent for chrome, 67 percent for diamonds, 58 percent for coal and 40 percent for gold.
“Most mining executives are optimistic about profitability of their businesses in 2021, with 70 percent of respondents indicating that they are projecting their businesses to be more profitable compared to 2020 while 20 percent are expecting the same level of profit as in 2020,” the Chamber said.
“Only 10 percent, mostly in the base metal’s industry, are projecting losses citing the possibility of Covid-19 related challenges including depressed markets and logistical disruptions to persist in 2021.”
In terms of employment, about 70 percent of the firms are expecting to maintain the same number of employees while 20 percent are expecting to employ more and 10 percent to shed staff. The sector did not lose any jobs as a result of the Covid-19 pandemic as it was regarded as essential and remained operational during the lockdown.