By Thomas Chidamba
ZIMBABWE’S mining sector anticipates a 7% growth in 2025, despite daily power outages lasting up to 14 hours, according to the Chamber of Mines’ recent announcement.
Mineral revenue is projected to reach $6 billion next year, an increase from $5.5 billion in 2024, based on the State of Mining Industry Report.
Mining companies are operating at 84% capacity while navigating high electricity costs, foreign currency shortages, and rising operational expenses. Despite these constraints, industry players remain optimistic.
Key drivers of growth: lithium, gold, and platinum
Speaking at the Mine Entra 2024 Conference, Chamber of Mines President Thomas Gono highlighted lithium as a major growth driver, with production expected to rise by 32%. Other significant contributors to output growth include gold at 9%, platinum at 4%, and coal at 10%.
The sector plans to invest $600 million in new expansion projects and beneficiation facilities, reflecting increased confidence among mining executives. These investments are expected to boost the Mining Business Confidence Index and drive employment growth from 57,000 to 58,700 jobs.
Profitability challenges and high operational costs
Despite anticipated revenue growth, profitability remains a concern. “While 2025 output and revenues are set to improve, profitability is likely to fall due to high production costs from electricity tariffs, fiscal charges, labour expenses, and exchange rate losses,” Gono noted.
Power supply remains a critical issue, with many mining operations relying on costly diesel generators to offset prolonged outages, which in turn raises production costs. Additionally, the foreign currency retention policy, requiring companies to surrender 25% of their export earnings at the official exchange rate, continues to strain operations.
Capacity utilisation and future legislative support
Capacity utilisation is projected to rise to 90% in 2025, driven by expected increases in gold and coal output. The sector also awaits the finalisation of the Mines and Minerals Act Amendment Bill, currently before Parliament, with hopes that it will introduce a more competitive and progressive framework for mining operations.
