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Business Reporter
STANBIC Bank Zimbabwe says it has invested $88,8 million to fund the capital needs of various players in the country’s mining sector in 2016 as part of its efforts to contribute to national development.

The $88,8 million worth of capital investment represents 46 percent of the sector’s working capital requirements for the year 2016, which was estimated at $194 million (10 percent of the industry’s gross income).

Stanbic, a subsidiary of the Standard Bank Group, also helped secure $85 million as long term capital for the mining sector’s operations. Head of corporate and investment banking for Stanbic Bank, Rhett Groves said the bank was committed to playing a pivotal role in contributing to national development, and funding the mining sector was one active way.

Groves said Stanbic Bank was aware that the prevailing economic environment had a negative impact on the performance of industry and commerce, inclusive of mining, with companies facing challenges related to accessing funds. Against that background, he said Stanbic Bank saw it fit to support the capital needs of the mining sector given its contribution to the fiscus.

“Stanbic is cognisant of the fact that the main foreign currency earners for Zimbabwe are gold, chrome and platinum, therefore, we wish to assist in sustaining the industry in the best way possible to ensure that even the employment benefits of the mining industry to the country remained sustainable even in the long run,” he said.

He said Stanbic Bank’s support for the mining industry and its huge benefits extends to its sponsoring of the Chamber of Mines’ main calendar event. Stanbic Bank has been a major sponsor of the Chamber of Mines’ AGM, held in the resort town of Victoria Falls, from as far back as 2009.

The bank hosts the presidential gala dinner, which is graced by very senior delegates of both private and public sector institutions such as the Ministry of Mines and Mining Development, Reserve Bank of Zimbabwe (RBZ) and esteemed regulatory, mining and milling companies.

In 2016, the mining sector remained the key driver of the country’s economic turnaround with gold having a share of 47 percent of the total mineral value contributing the largest share to the total mining income. While the country has more than 40 mineral endowments, over 90 percent of the value of mineral output in 2016 was accounted for by five key minerals.

Key minerals currently being extracted include gold, platinum and associated minerals, diamonds, nickel, coal and chromite. Mineral output recovered in 2016, underpinned by increases in platinum, palladium, gold and nickel. Diamonds and coal recorded significant output declines compared to 2015. Average capacity utilisation for the mining sector increased from 60 percent in 2015, to 64 percent in 2016 with the platinum sector operating at full capacity, while gold recorded an increase to 79 percent, from 77 percent in 2015.

Declines in capacity utilisation levels were recorded in respect of coal (50 percent to 30 percent) and nickel (55 percent to 41 percent). Most companies that were operating below full capacity cited capital shortages as the major constrain undermining capacity utilisation, coupled with high cost structure and ageing equipment.