Home »
Zimbabwe Mining Report Q2 2011

Zimbabwe Mining Report Q2 2011

Double click on above image to view full picture

Email to a Colleague - Print - Fax Order

Additional Information

Price	$530.00
Publisher	Business Monitor International
Date of Report	Apr 8, 2011

Add to Wishlist | Add to Compare

Qty:

-OR-

Quick Overview

Iran To Invest In Zimbabwean Uranium Mining?
In what could prove a controversial development, there were several media reports in early March 2011 that Iran is looking to buy uranium from Zimbabwe, in defiance of ongoing UN sanctions prohibiting Iran from buying nuclear-related materials. Zimbabwean foreign affairs minister Simbarashe Mumbengegwi has said that his country plans to cooperate with Iran on uranium mining, telling the local News Day newspaper that: ‘Zimbabwe has rich uranium reserves but is faced with a shortage of funds and does not possess the technical knowledge and equipment needed for extracting rich uranium ores.’ Moreover, the minister claimed that working together on uranium mining would ‘improve the economic situation of both countries’. Media reports citing leaked intelligence information indicate that Iran would provide Zimbabwe with fuel, in return for exclusive access to Zimbabwean uranium.
In BMI’s opinion, such a provocative move by Harare, in defiance of international pressure on Iran to cease its nuclear programme for fear it is looking to build nuclear weapons, could well prove counterproductive, especially with international investors only just starting to return to the Zimbabwean mining sector following many years of internal political and economic strife. According to the UK’s Telegraph newspaper, Zimbabwe has estimated uranium reserves of some 455,000 tonnes, mainly located north of Harare. It would reportedly take 2-3 years of development before the country could produce uranium, with the reserves then set to be exhausted within five or so years.
Mugabe Returns To Issue Of Mining Sector Ownership Also adding to the growing uncertainty surrounding Zimbabwean mining at the present time, President Robert Mugabe has returned to the issue of local ownership of mining assets, using a speech given on his 87th birthday to attack local platinum miner Zimbabwe Platinum (Zimplats) for ‘taking all the money to South Africa’, where company parent Impala Platinum is based, according to a March 2011 in Mining Weekly.
At the end of 2010, there had been hopes that the government was putting the issue of indigenous empowerment to one side to allow the local economy time to recover. At that time, the government stated that its controversial Indigenization and Empowerment Act – which originally called for a 51% stake in all mining companies (with assets over US$500,000) to be divested to indigenous Zimbabwean groups within a five-year period – had been suspended until the local economy recovers.
Given Mugabe’s recent attacks on Zimplats and its South African parent company, then there may once again be cause for concern over the issue of ownership over the coming months. As this report went to press in mid-March, Reuters was reporting that Zimbabwe plans to set up a sovereign wealth fund to own a 51% stake in all mining companies, citing comments made by Minister of Youth Empowerment and Indigenisation Saviour Kasukuwere.
Country Overview
The geology of Zimbabwe is very richly endowed with deposits of chrome, gold, nickel and platinum, among other minerals. The country’s gold reserves are among the largest in Africa, while it hosts the second-largest platinum reserves in the world. Another segment that has caught the attention of miners in Zimbabwe is diamonds, following the discovery of a number of significant kimberlites.
Industry Forecast
Zimbabwe’s mining sector experienced a traumatic series of years over the past decade. However, there are reasons for guarded optimism as we enter 2011. Investment is returning to the sector, following the establishment of a national unity government in 2009. The liberalisation of the gold sector in the same year was a further positive.
Consequently, we believe the scene is set for a period of strong growth for the Zimbabwean mining sector, although we would stress that this remains dependent on a continuation of the relative political stability that has endured across 2010. As such, we will continue to monitor government pronouncements on the mining sector, plus the attempts by Harare to forge new uranium mining initiatives with Tehran, to see if any changes to our forecasts need to be made as the year unfolds.

Table of Contents

Executive Summary ........................................................................................................................................ 5
SWOT Analysis ................................................................................................................................................ 7
Zimbabwe Political SWOT .................................................................................................................................................................................... 7
Zimbabwe Economic SWOT.................................................................................................................................................................................. 7
Zimbabwe Business Environment SWOT .............................................................................................................................................................. 8
Global Mining Outlook .................................................................................................................................... 9
Table: Companies’ Revenue And Profits, 2010................................................................................................................................................... 10
Table: Other Key Developments ......................................................................................................................................................................... 11
Table: Rare Earth Projects ................................................................................................................................................................................. 12
Table: Other Developments ................................................................................................................................................................................ 13
Industry Trends And Developments ............................................................................................................ 14
Overview ............................................................................................................................................................................................................. 14
Regulatory Structure And Developments ............................................................................................................................................................ 15
Key Projects ................................................................................................................................................... 17
Metals ...................................................................................................................................................................................................................... 17
Iron ..................................................................................................................................................................................................................... 17
Gold .................................................................................................................................................................................................................... 17
Chrome ............................................................................................................................................................................................................... 19
Nickel .................................................................................................................................................................................................................. 19
Platinum ............................................................................................................................................................................................................. 20
Minerals ................................................................................................................................................................................................................... 20
Coal .................................................................................................................................................................................................................... 20
Diamonds ............................................................................................................................................................................................................ 22
Business Environment ................................................................................................................................. 23
Mining Business Environment Ratings................................................................................................................................................................ 23
Table: Africa Mining Business Environment Ratings.......................................................................................................................................... 23
Legal Framework................................................................................................................................................................................................ 26
Labour Force ...................................................................................................................................................................................................... 27
Table: Zimbabwe’s Demographic Indicators, 2000-2030 ................................................................................................................................... 27
Foreign Investment Policy .................................................................................................................................................................................. 28
Political Environment .................................................................................................................................... 30
Political Outlook ................................................................................................................................................................................................. 30
Long-Term Political Outlook .............................................................................................................................................................................. 32
Industry Forecast Scenario ........................................................................................................................... 36
Table: Zimbabwe’s Mining Industry, 2007-2015 ................................................................................................................................................ 36
Competitive Landscape ................................................................................................................................ 38
Table: Key Players In Zimbabwe’s Mining Sector .............................................................................................................................................. 38
Company Monitor .......................................................................................................................................... 39
African Consolidated Resources ......................................................................................................................................................................... 39
Caledonia Mining Corporation........................................................................................................................................................................... 40
Zimbabwe Platinum Mines (Zimplats) ................................................................................................................................................................ 41
Commodities Forecasts................................................................................................................................ 43
Aluminium........................................................................................................................................................................................................... 43
Copper ................................................................................................................................................................................................................ 43
Lead .................................................................................................................................................................................................................... 44
Nickel .................................................................................................................................................................................................................. 45
Tin....................................................................................................................................................................................................................... 45
Zinc ..................................................................................................................................................................................................................... 46
Gold .................................................................................................................................................................................................................... 47
Global Assumptions ..................................................................................................................................... 49
Table: Global Assumptions, 2009-2015 .............................................................................................................................................................. 49
Table: Regional Real GDP Growth, 2010-2013 (% change y-o-y) ...................................................................................................................... 50
Table: Selected Exchange Rates, 2010-2013 (average) ...................................................................................................................................... 50
Developed States ................................................................................................................................................................................................. 51
Table: Developed States’ GDP Growth, 2010-2013 (% change y-o-y) ................................................................................................................ 51
Emerging Markets .............................................................................................................................................................................................. 52
Table: Emerging Market’s GDP Growth, 2010-2013 (% change y-o-y) .............................................................................................................. 53
Consensus Forecasts........................................................................................................................................................................................... 54
Table: Consensus Forecasts, 2011 And 2012 ..................................................................................................................................................... 54
Business Environment Ratings Methodology............................................................................................. 55
Table: Mining Business Environment Indicators ................................................................................................................................................ 56
Table: Weighting Of Components ....................................................................................................................................................................... 57