Government says that the mining sector is poised to surpass agriculture which currently contributes between 9-10% to Gross Domestic Product.
According to the Finance Minister Mthuli Ncube’s Midterm budget review statement presented in parliament today , Platinum Group Metals (PMGs) and diamond registered strong performance during the first quarter of 2020 as compared to the same period in 2019, while gold, chrome and nickel fell short of targets.
“The mining sector, being the largest foreign currency earner (60% of total foreign currency) is poised to surpass agriculture which currently contributes between 9-10% to GDP.
“Currently, mining sector contributes about 8% of total GDP and has set a target of generating US$12 billion revenues by 2023 from as little as US$2.7 billion in 2017.
“Therefore, growth for mining sector is now projected to slow-down to -4.1% in 2020, reflecting the impact of COVID-19 and other challenges including perceptions around retentions, erratic power supply and loss of skills in the mining sector.
“Save for coal, most mineral prices were firming up from May 2020, with gold prices reaching as high as US$1732.22, while nickel recovered from US$11 804/ton in March to US$12 727/ton by May 2020, read the statement.
According to the statement total output of key PGMs surpassed output during the first quarter of 2020, as compared to same period in 2019.
“PGMs benefited from favourable international prices, as well as relative stable power supply.
“International prices of platinum were about 10% higher than those in 2019. Therefore, platinum output at 3 544 kg, was 3.7% above output produced in the same period in 2019.
“Platinum is projected to increase to 14 169 kg by the end of 2020, benefitting from the favourable prices, particularly of rhodium and palladium,” read part of the statement.
The statement added that diamond output in the first quarter of 2020 surpassed same period last year by about 17%, largely on account of increased production from Zimbabwe Consolidated Diamond Company (ZCDC).
Meanwhile, the statement revealed that the budget will expend more resources on capacitating security institutions engaged in monitoring and curbing mineral leakages.