Professor Francis P. Gudyanga, Permanent Secretary, Zimbabwe Ministry of Mines and Mining Development

Professor Gudyanga elaborates on Zimbabwe’s strategy and opportunities in its mining sector.

Prof-Francis-P-Gudyanga-BLOGCan you give us a brief overview of the Zimbabwean Mining sector and its importance in the Zimbabwean economy?

FPG: Mining not only contributes 50% of Zimabwe’s total exports but is also a key sector in the generation of employment. It counts for a great part of formal employment as well a large number of informal jobs through the artisanal mining sector. Zimbabwe is also hoping to leverage the mining sector to redevelop its manufacturing sector: lately the value addition sector has been in decline and we would like to revive it. Commodities in the iron and steel industry such as iron, coal and chrome easily lend themselves to value addition. Zimbabwe’s platinum is still being refined in South Africa, but we are ready to go to great efforts to start refining it in Zimbabwe. We would like to have a fully-fledged refinery for platinum and base metals within the next two or three years.

Zimbabwe has received much negative press over the last 15 years. What can you say to possible investors who shy away from Zimbabwe’s mining sector due to its portrayal in international media?

FPG: Having just returned from Antwerp and South Africa, this is a very timely question. Zimbabwe used to be a big item on the agenda when it came to talks on the Kimberley Process Certification (KPC), but since the European Union has lifted all sanctions on Zimbabwean diamonds, we are very pleased to talk about it. The perception that Zimbabwe is not an ethical mining country is no longer applicable and is misplaced. We have seen a resurgence of investment inquiries, particularly in our big volume minerals such as gold, diamonds, platinum, iron and coal. Transaction and business is facilitated by the fact that Zimbabwe now has a multicurrency system. We are implementing indigenisation legislation that stipulates that 51% of business must be owned by an indigenous element, we have found that the new companies are complying with this law and we welcome discussions and negotiations when it comes to committed and serious investors.

What are the key challenges that need to be addressed for Zimbabwe’s mining industry to flourish again?

FPG: At the moment the sector is gripped by cash liquidity constraints and we would like more investment to flow in from outside of Zimbabwe. The fact that we have lost a lot of skills to mining sectors abroad during the period of hyperinflation has left some skills gaps in the value chain that need to be addressed and is also linked to the past negative image of the country, but I believe we have gone over this hump. Looking at the medium-term plan for the industry, we are in the processing of revising the Mines and Minerals Policy. We have entered a phase where we are working on a raft of incentives that will encourage investors to come into Zimbabwe. The new policy covers areas like investment and indigenization, as well as issues that have been neglected such as environmental sustainability. Another issue that will be addressed in the new policy is exploration, especially in gold and diamonds where companies have tended to extricate alluvial deposits without investing in further exploration. As they mine, they must also invest in further exploration so that we attain a better picture of the mineral endowment of the country. We are a new team in the ministry and we are serious about pushing for the new policy to be implemented early in 2014. We also expect to update the Precious Stones Act and expect this legislation to be passed early in 2014.

What makes Zimbabwe a preferred mining destination in Africa?

FPG: Zimbabwe holds a range of up to 60 different minerals and our mines are still by-and-large open cast, which gives the opportunity of low production costs compared to other countries where mining has to be done very deep. From a security standpoint, Zimbabwe is very safe with low instances of crime. The fact that we are an English-speaking nation with a multicurrency system and no exchange controls facilitates business. Geographically, Zimbabwe is centrally and strategically positioned within the mining region of Central and Southern Africa and has a well-developed infrastructure to reach neighbouring countries through a transportation system that consists of both road and rail. Although many skilled Zimbabweans have left during the ‘Lost Decade’, companies with a competitive remuneration package have no difficulties recruiting the right skills, as Zimbabweans remain highly educated and well versed in mining.

Do you have a final message for investors looking at Zimbabwe as a possible mining investment destination?

FPG: We would like to invite any serious investor to come and visit Zimbabwe to see and feel the opportunities that are here. We are confident that you will like it from all aspects. We have a large number of minerals, particularly coal, iron, chrome, platinum and diamonds. The country is open for investment in all those minerals. We are looking for serious investors: not speculators raising funds abroad on exploration licenses that they do not intend to use. We have a ‘use-it-or-lose-it policy. There is a lot of work to be done, but things are happening in Zimbabwe and the future for mining is looking bright at last.

This interview was conducted as part of the research conducted on African mining jurisdictions by Global Business Reports (GBR) as part of our partnership with African Mining Indaba LLC. The aim of this partnership is the production of the single most comprehensive intelligence report on the continent’s mineral sector. The Official Mining in Africa Country Investment Guide, will be launched next February 2014, as the only official publication providing country-specific information at Africa’s top mining event, the 2014 Investing in Africa Mining Indaba™ held in Cape Town, South Africa.

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