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Mining revenues are expected to drop by 10% this year for Zimbabwe due to a global fall in commodity prices and persistent power cuts, according to a report by IH Securities. The sector generated USD 5.2 billion last year.
Mining revenues are expected to drop by 10% this year for Zimbabwe due to a global fall in commodity prices and persistent power cuts, according to a report by IH Securities. The sector generated USD 5.2 billion last year.
In its outlook for the sector, IH noted that the market was likely to experience continued volatility, persistent power cuts, and erratic policy shifts. Forecasts for 2024 point to growth of 7.6% in mineral output as mining companies ramp up production to compensate for 2023’s revenue losses.
Mineral revenues, however, are forecast to fall 10% in 2024 as global prices of most metals are expected to remain depressed. This follows a 7.6% decline in mineral revenue to USD 5.2 billion in 2023 from USD 5.6 billion in 2022. In the outlook, the mining sector will likely continue battling market volatility, persistent power cuts, and erratic policy shifts, the firm said. A couple of new mines opening specifically in the Lower Veld, are coming under pressure.
For instance, during the first five months of the year, Zimplow’s overall revenue recorded a 3% decline compared to the same period last year, with sales tonnage showing a 9% negative variance. The decrease in volumes was attributed to reduced orders from various mining houses due to lower global mineral prices. The decrease in volume emanated from reduced orders from various mining houses due to a reduction in global mineral prices.
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Global supply chains in the mineral sector are currently stretched due to security issues in the Red Sea, forcing shipping lines to take longer routes around the Cape, which has affected Zimplow’s shipments. Despite these challenges, Zimplow remains focused on enhancing its products and services, ensuring competitiveness, and supporting the government’s mining sector initiatives.
To compound the situation, some reports of rolling blackouts experienced in the past few weeks have paralyzed strategic industries, triggering fears of a major downturn that could precipitate firm closures and job losses.
Industry leaders warned that so deep were the blackouts that clusters of manufacturing firms have been forced to run for only six hours a day. It is a fresh blow to an economy that has been rattled by perpetual problems for over a decade.
