New Materials research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 05/30/2013 -- Zimbabwe's mining sector is set for rapid development as the country dramatically recovers from two decades of declining output. Zimbabwe is richly endowed with deposits of chrome, gold, nickel and platinum, among other minerals. Its gold reserves are among the largest in Africa, while it hosts the world's second largest platinum reserves. Another segment that has caught the attention of miners in Zimbabwe is diamonds, following the discovery of a number of significant kimberlites. Forecasting growth rates for the Zimbabwean mining sector is a highly uncertain process at present, with so much of the sector's direction governed by political events. At base, we believe the scene is set for a period of strong growth, as the industry recovers from a disastrous period during the mid-2000s. While we see significant growth potential in gold and platinum output, it is in diamond production that the country holds the most promise, having the potential to match the largest producers over the long term.
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Over the short term, there could be renewed weakness in mining sector output, as the country looks to introduce its indigenisation policy, which could see companies scaling down their projects or leaving.
However, for the most part we believe that, despite this policy, investment will continue to flow in, given Zimbabwe's colossal mineral reserves. BMI believes issues regarding the majority local ownership of mining assets remain the key challenge facing foreign mining companies in Zimbabwe. In 2011 the government committed to the continuation of its controversial Indigenization and Empowerment Act, which calls for a 51% stake in all mining companies (with assets over US$500,000) to be divested to indigenous Zimbabwean groups, with this new ownership structure to have been agreed upon by September 2011. Reaction from foreign miners operating in Zimbabwe has been negative, with Canadian miner Caledonia Mining stating that it will limit its spending in the country until there is further clarification about how indigenisation will be introduced.
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