IN 2025, Zimbabwe’s mining sector reveals a tale of two markets: the Victoria Falls Stock Exchange (VFEX) thrives with dollar-denominated stability, while the uncertainty of the local currency affects the performance of the Zimbabwe Stock Exchange (ZSE), resulting in escalating production costs and diminishing profits for essential minerals.
This highlights the sector’s wider challenges and opportunities.
There is a palpable sense of optimism at the Victoria Falls Stock Exchange (VFEX), where firms like Caledonia Mining Corporation are flourishing thanks to a stable, dollar-based trading environment.
By January 2025, the VFEX had achieved a combined market capitalisation of around US$1.32 billion, with its All Share Index reaching 105.17 points during the same timeframe.
Companies such as Caledonia Mining Corporation and Bindura Nickel Corporation have taken full advantage of this stability.
Their strong performance has enhanced investor confidence, positioning the VFEX as an appealing venue for both foreign and domestic investment.
In stark contrast, the Zimbabwe Stock Exchange (ZSE) seeks stability as it grapples with considerable economic challenges that are hindering investors’ real return levels.
Despite these challenges, the ZSE remains a variable investment option.
This is evidenced by the 18% increase in its market capitalisation in 2024, which was largely a result of investors’ inflation-hedging strategies.
The ZSE’s All-Share Index surged by 118% to finish the year at 217.58 points, following a rebase to 100 points earlier in April.
However, these gains conceal more profound challenges within the mining sector. Rising production costs and falling mineral prices have clouded the outlook for 2025.
The Chamber of Mines of Zimbabwe anticipates an 8% rise in production costs and a 15% decrease in prices for key minerals, including platinum group metals and lithium.
Global commodity price trends have also influenced Zimbabwe’s mining industry. Lithium, once hailed as Zimbabwe’s “white gold,” saw price drops between 2022 and 2024 due to oversupply and reduced demand for electric vehicles.
Analysts expect lithium prices to stabilise in 2025, but they are unlikely to reach the peak levels seen in 2022.
Gold presents a more positive scenario for the sector. Prices are expected to increase by 12% in 2025, offering much-needed relief for Zimbabwe’s gold miners.
Trevor Barnard, CEO of Kuvimba Mining House, remains cautiously optimistic about a potential rebound in lithium prices by next year, although he notes they will likely remain below previous highs.
Zimbabwe’s mining sector also contends with fierce competition from regional players. Countries such as Botswana and South Africa continue to draw significant investment due to their stable regulatory frameworks and developed infrastructure.
In contrast, Zimbabwe grapples with power shortages, which led to an estimated loss of $500 million in potential revenue for the mining industry in 2024.
Energy demand in Zimbabwe is expected to increase from 600 to 800 megawatts per day by 2025, which will place additional pressure on the industry.
Without immediate investment in dependable power generation and infrastructure, the sector may miss out on significant growth opportunities.
To tackle these issues, Zimbabwe needs to implement strategies for sustainable development.
Consistent and transparent regulations are essential for attracting and retaining investment.
Building strong infrastructure, especially in energy and transportation, will enhance mining operations and boost efficiency.
Promoting value addition and the beneficiation of minerals can also maximise the sector’s revenue potential.
Furthermore, Zimbabwe could gain from adopting regional best practices, particularly from its neighbours, to enhance its investment climate.
Zimbabwe’s mining sector is at a critical juncture. While the VFEX presents a stable and promising avenue for growth, the ZSE requires the Government’s support and strategic intervention to overcome its challenges.
With the right policies and investments, Zimbabwe can leverage its rich mineral resources to promote sustainable economic growth in the future.
