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BMI View: Zimbabwe's mining industry will grow steadily in absolute terms over our forecast period
through to 2020 as production increases across the key platinum and diamond mining sub-sectors.
Latest Developments & Structural Trends
? Zimbabwe is richly endowed with deposits of chrome, gold, nickel, diamonds and platinum, among other
minerals. Its gold reserves are among the largest in Africa, while it has the world's second-largest
platinum reserves. Diamond reserves are measured to be the second-largest globally after Russia.
Development in these key markets together with a gradual more stable political and economic climate has
seen the country's status as major global producers strengthen in recent years. In terms of overall output,
Zimbabwe is challenging the world's largest platinum producers, Russia and South Africa, while a recent
reduction in taxes for smaller gold miners will see production rise at almost a double-digit rate this year.
? The mining sector will nevertheless face increasing challenges to its current growth trend, however.
Political and economic risk remains a particular concern from both a regulatory and investment point of
view and the ZANU-PF will continue to spell trouble for the future of the industry.
? Zimbabwe is posed to challenge Russia and South Africa as the world's leading platinum producer over
the coming years as new investment by both existing and new players allows the country to capitalise on
its considerable reserves, which are the second largest in the world. Coincidentally, the country will see
its status lifted by slowing production growth in neighbouring South Africa, where serious difficulties as
a consequence of labour unrest and high energy costs will mean that the world's largest platinum
producer will experience major difficulties in maintaining production levels.
? We forecast Zimbabwe to experience a temporary boost in gold production this year as the impact of a
recent reduction in gold mining levies leads to an increase in activity by smaller mining firms.
Zimbabwe's gold production rose by 25% during Q115 to 4,180kg, according to the country's Chamber of
? In terms of volume, the African countries for which we forecast production (Angola, Botswana, DRC,
Namibia, South Africa, Tanzania and Zimbabwe) to total 4.9 million (mn) carats over our forecast period
to 2020, dwarfing other regions' additional output.
? While a more consolidated mining landscape may help in raising the country's overall production levels,
it remains to be seen the impact it has on deterring foreign investment into the sector. The recent
consolidation highlights the government's increasingly hands-on role in diamond extraction and follows
the introduction of a black economic-empowerment programme, which requires foreign-owned
companies, including mines, to sell 51% of their shares to black Zimbabweans.