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Business Reporter

Zimbabwe’s mining executives are confident about 2022 industry prospects on the back of positive commodity price outlook, improved capacity utilisation and anticipated increase in output, according to a new survey published on Wednesday.

But they expect the domestic investment climate, characterised by high costs of capital, foreign currency constraints and poor infrastructure to remain depressed.

The Mining Business Confidence Index (MBCI), which gauges confidence among local miners, is expected to increase to 17 next year, from 9 in 2021 the, biggest jump in nearly four years.

The index scale ranges from -100 to +100, with the lowest score representing the least level of confidence and the biggest score representing the highest.

“Generally, mining executives are confident about the prospects for their businesses in 2022.”

“Notable among the positive sentiments include optimism about commodity price outlook, improvement in capacity utilisation and anticipated mineral output growth,” said the survey.

Zimbabwe is targeting to grow revenue from minerals to US$12 billion by 2023 as it seeks to transform the country into an upper middle income economy by 2030. Gold exports are expected to reach US$4 billion while platinum exports would hit US$3 billion.

Diamond production is expected to increase to 11 million carats by 2023 driven by new investments.

The Government is also focusing on value addition, enhanced investment within the sector, increased productivity, employment creation, growth in exports and foreign-currency generation.

The majority of the mining executives surveyed said they were planning to ramp up production in 2022.

It said approximately 58 percent of the respondents are planning to expand production by 40 percent. Gold output is expected to increase by 21 percent in 2022 to 35 000 tonnes while coal and diamond production will expand by 40 and 43 percent respectively.

The survey also shows that capacity utilisation is expected to slightly increase to 83 percent in 2022 from 80 percent in 2021.

“Survey findings show that there are some new projects as well as existing operations that have been undertaken specifically in the gold and platinum industries that have potential to increase output in 2022,” said the survey.

“Three gold mines indicated that they had just resumed operations in 2021 and would ramp up production in 2022.

“Seven other gold mines indicated that they are undertaking expansion projects at their operations. All platinum projects indicated that they are spending on capital projects with additional output expected in 2022.

On the capital expenditure, the majority of the miners are looking to spend retained earnings on various capital projects.