Zimbabwe mulls strategy to guard against softening global mineral prices
Story by Stanley James, Business Editor
THE Government is in talks with representatives of mining companies over long-term solutions to guard against softening global prices threatening viability.
Zimbabwe’s minerals like gold, platinum, chrome, lithium, chrome, nickel and diamonds are feeling the pinch of the softening international prices.
The trend, which has been described by the Chamber of Mines as worrisome, has also seen some of the mining firms adopting cost-reduction strategies to stay afloat.
Mines and Mining Development Minister Honourable Zhemu Soda, while confirming the negative effects of softening prices on the profitability of mines, revealed talks are in motion to rescue the mining sector.
“Zimbabwe is unfortunate in that we do not determine the prices of the minerals on the global markets, in fact, the country is a price taker therefore when the prices are softening this affects the profitability of the mines, we are aware of the current situation on the ground however this is a cyclical aspect meaning that very soon it will end depending on the market trends. In fact, we are also engaging the mining sector to get the real facts on the ground and chart the way forward in as much as sustaining costs is concerned, as well as the need to ensure that the mining sector continues to play a pivotal role in the growth of the economy as well as facilitating overall economic growth,” he said.
While proposals by the mining sector in guarding against the softening international prices include the need for the government to ease high production by lowering taxes, the government is however upbeat about the outlook of the sector in light of changing global demand and supply chains for resource commodities.
He added, “Zimbabwe is not the only country feeling the pinch of the softening global prices. This is a global phenomenon that is being felt across the world. What we need is to therefore to relook into the causes of the matter and make sure we come up with long term measures that can enable the nation to benefit.
“Indeed, it has not been looking good but we are confident it is a passing phase that will end and further reactivating a boom in terms of pricing models within the global markets. So, in terms of our engagements with the miners, we are looking at several issues so that they are not caught unaware when prices slump. It is a win-win situation that entails both of us to come up with a workable common goal or agenda.”
The World Bank estimates show that a slowdown in economic activities for major economies will result in mineral commodity prices declining by over five percent this year.
