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Zimbabwe’s mining sector seeks to maintain profitability

Zimbabwe’s mining industry is upbeat about maintaining profitability momentum going into 2022, although the trajectory can be lower than this year’s levels.

The mining industry is one of the major economic mainstays to anchor the country towards an upper middle-income society by 2030.

According to a recent survey by the Chamber of Mines of Zimbabwe (CoMZ), 52% of the respondents project that their businesses’ profitability would improve next year.

“Mining executives are confident about the profitability prospects of their businesses in 2022, albeit lower than 2021 citing operating costs, which they anticipate to increase,” said the chamber of mines.

A total of 28% of the respondents from the recent survey conducted across the country project that profitability prospects would remain the same as this year while 20% predict that the situation will worsen next year.

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Major cost drivers identified by CoMZ were largely to do with procurement, labour, and electricity.

“Among other costs were amortisation, external contractors, and Statutory parents,” CoMZ said.

It said procurement was the major allotment from revenues generated in the mining industry.

The respondents also declared that they distributed their revenues as follows: salaries and wages 23%, Government taxes (18%), and communities (6%).

In terms of employment prospects, about 55% of the respondents indicated that they were likely to improve the number of their employees in 2022.

This is on the back of improvements in the Covid-19 management as well as some expansion projects, which are expected to trigger the hiring of more workers.

More than 70% of employees registered under the National Employment Council for the mining industry have been vaccinated against the Covid-19 pandemic.

The NEC for the mining industry has over 45 000 miners.

Zimbabwe’s mining sector is expected to grow by 3,4% this year before propelling to 8% in 2022 as the country continues to leverage its mineral resources to achieve the desired growth in line with the US$12 billion milestone by 2023.

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