Zimbabwe: Electricity sector requires $ 10 bn.

Nov 17, 2010 12:00 AM

Zimbabwe's electricity sector requires at least $ 10 bn to achieve sufficiency for effective production at the country's mines, the Chamber of Mines president Victor Gapare has said.
The Chamber of Mines president was speaking at a gathering of Zimbabwe and South African business delegates in the capital.
Mr Gapare said Government needed to focus on the development and refurbishment of key infrastructure, especially in the energy sector in view of its immense value to the productive sectors of the economy.
"It is important to realise the requirement for investment in infrastructure that supports growth in mining.
"It is estimated that for self sufficiency in electricity investments to the tune of $ 10 bn may be required for the various electricity generating projects including Sengwa and Batoka with an additional generating capacity of 3,000 MW," said Mr Gapare.

The mining sector has been especially hard-hit by the electricity deficiency in the country, which is estimated at over 50 %. He however, noted an improving operating environment for the sector.
"In spite of constraints of Power and long-term funding, the mining industry in Zimbabwe is back on a growth path. The stable macro-economic environment has provided better opportunities for planning and execution of projects.
"Investor interest is still high as evidenced by the number of business inquiries for investment opportunities in mining,".

On the other hand, the Chamber of Mines president lamented the minimal level at which mineral rights were being developed in the country, arguing that the country's investment environment was not conducive for holders of mining rights to raise capital.
On a similar note, international gold consultancy firm GFMS Ltd has since noted that Zimbabwe has the least development projects in the region at least in respect of its gold sector.
"The reason these mineral rights have been developed is because all companies have failed to raise capital on the market," said Mr Gapare.
In Zimbabwe, at least 50 % of all mineral rights are held by local companies in which the Government has a controlling stake such as the Zimbabwe Mining Development Corporation, Hwange and the Zimbabwe Iron, among others.
Government's recent decision to sell its 53 % controlling stake in Zisco Steel to Mauritian firm Essar Holdings has generally been hailed as a positive development within the mining sector.
There is significant interest in the country's iron ore resources particularly from the India and China markets.

The Chamber of Mines has indicated that the country's mining sector requires around $ 5 bn within the next 5 years to boost minerals output.
"A Chamber of Mines survey of its members on funding requirements has shown that the local mining industry requires between $ 3 and $ 5 bn over the next 5 years for re-capitalisation.
"This is a significant amount of money and our economy does not have this kind of money at this stage," said Mr Gapare.
According to the Chamber of Mines, the sector's capital requirements between the various minerals can be broken down as follows, gold $ 1 bn, platinum $ 1,2 bn, chrome $ 250 mm, nickel $ 110 mm, coal $ 280 mm, and diamonds $ 300 mm.


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