AT the height of beneficiation campaigns one would have thought Zimbabwe had turned the corner and mutating from a regional bread basket to southern Africa’s “mining basket”.
The campaigns were so spirited that indeed leveraging the country’s vast mineral wealth sounded like manna from heaven.
But, some two years or so down the line, the intense focus on adding value to the country’s minerals seems to have completely faded away as revealed in a recent mining survey which showed that government still does not have a policy in place to push the vaunted agenda.
According to the State of the Mining Industry Survey for 2015 commissioned recently by the Chamber of Mines, government has been formulating and implementing mineral beneficiation programmes on an ad hoc basis.
“The survey established that the country did not have a mineral beneficiation policy or mineral development policy to guide regulations, strategies, plans and programmes. All respondents (100 percent) said the beneficiation and value addition of mineral resources was key to industrial and economic development”.
Evidence from sampled respondents showed that all mineral beneficiation projects were encountering challenges.
The most frequently-mentioned challenges were capital constraints, energy challenges, inadequate skills and low feedstock.
Analyst Godfrey Kanyenze argued that value addition was still the way to go despite the problems.
“At the moment we are only realising about 10 percent of the potential value of our exports without beneficiation,” he said.
Kanyenze, however, cautioned that the country had huge obstacles in its path.
“We have to do a lot. We are undergoing de-industrialisation. Over 90 percent of jobs are now in the informal sector. We are going through structural regression,” he said.
The survey showed that mining companies had undergone different stages of the beneficiation process.
About 60 percent of the respondents indicated that they had invested in value addition and mineral beneficiation projects at their operations over the past 10 years, some of which are now on stream.
The mineral beneficiation projects were distributed as follows: new plant installations (33,2 percent), plant refurbishments (42,2 percent) and plant upgrades (24,6 percent).
All platinum producers had on-going or planned beneficiation projects.
The bulk of current and planned beneficiation projects (40 percent) were in the gold sector.
The majority of those that have undertaken value addition projects were in the gold sector, where all respondents indicated that they invested in onsite ore treatment plants with 80 percent operating crushing and milling plants as well as smelters. Twenty percent have crushing plants and smelters only.
Beneficiation in the gold sector is done exclusively by the State-run Fidelity Printers and Refineries.
In the platinum sector, all producers own concentrators and one of the players owns a smelter.
The chromium industry has 12 smelters and other treatment plants for the production of high carbon ferrochrome, low carbon ferrochrome and ferrosilicon chrome.
However, five smelters were on care and maintenance, while one resumed operations as of 2015.
All the pipeline beneficiation projects are mainly in gold, base metals, and energy minerals.
The projects are at various stages of implementation (pre-feasibility, fundraising and development) and range from new plant installations and refurbishment to upgrades.
According to the survey the most significant projects entailed the refurbishment of two base metal refineries to produce final products.
Fourteen percent of respondents said they had opted to use debt financing for their projects. The rest opted for either equity or debt and internal cash resources to fund the beneficiation projects. Some of the publicly quoted operators have combined debt and equity financing.
Follow us on Twitter on @FingazLive and on Facebook – The Financial Gazette