stanley jamess.jpgBy Stanley James

 

The US$3bn capital-raising plan for mineral exploration and the purchase of new machinery in the mining sector in the next 5 to 10 years is under the spotlight as stakeholders seek to assess whether the plan can restore business confidence within the industry.

 

 

The industry, which had experienced production constraints during the past 10 years due to illegal sanctions imposed by the west on the country, plans to raise fresh funds so as to regain its position in the economy in terms of job creation and export income generation.

 

While stakeholders in the mining sector are in discussions with government, regional and international financial institutions on strategies to mobilise at least US$3 billion, there are concerns as to whether sourcing for the funds needed for economic growth and recovery will be successful.

 

Where the funds should be invested is also another issue, with some analysts favouring investment for value addition of Zimbabwe’s minerals, while other prefer using the funds for exploration and increasing production.
 
Chamber of Mines President, Mr Victor Gapare says the proposed capital raising exercise is the real solution to challenges hindering production as well as ensuring that the sector achieves its 2010 growth target of 33% from 10% last year.

 

“We are really serious with the policy and we hope it will assist in the revival of mining operations,” said Mr Gapare.

 

There is however hope that the mining sector can reposition itself among the best in the world following the re-opening of several mines that had shutdown operations.

 

Mining Economist, Mr. Joseph Mverecha says government and mining companies should work together in crafting  policies  to secure long term credit lines.

 

“What we need is a strategy where funds can be unlocked in the economy so that we derive better returns,” Mr Mverecha said.

As  government forges ahead with the indigenisation policy which is aimed at ensuring that locals acquire majority shareholding in foreign owned companies,  the real issue is how much from the funds being mobilised can be channeled to indigenous players in the mining industry. 

Zimbabwe Small Scale Explorers and Miners Association President, Mr. Hardwork Mukwada is making a case for the consideration of  small scale miners.

“We also need funds and it is within our belief that such initiatives are done to restore  economic confidence,” said Mr Mukwanda.

 

Government has shown commitment to the recovery of the mining sector through creating an enabling environment that provides an opportunity for growth and creation of wealth for indigenous players.

 

One question that keeps coming to mind is to what extent can other stakeholders play a role in mobilising investment funds for the mining sector?