A recent mining conference held in Zimbabwe at the end of February - the Zimbabwe Mining Conference (27-28 February) - has raised the question: has the time now arrived for this country’s mining sector?

Zimbabwe has overcome unprecedented change since November 2017, when new president Emmerson Mnangagwa took office. This political change has boosted business confidence and caught the attention of the international market.

This change at the top has encouraged a unanimous feeling across the country and at the conference - Zimbabwe is ‘open for business’. The mining sector in particular is one which is drawing lots of positive attention.

The three key components to the development of a successful mining industry are:

• prospective geology,
• human resources and
• capital.

It is widely accepted that Zimbabwe has the first two. There remains a chronic lack of capital though, particularly from international sources.

The Zimbabwean mining industry faces many challenges which were highlighted at the conference:

  • Many projects in the country have been starved of any form of funding for over 10 years. Estimates at the conference have suggested that Zimbabwe will need $7 billion to fund any immediate capital expenditure requirements if the mining industry is to return to anything like its former self. 
  • The conference also highlighted the issue that mining is a global industry and many capital providers are already involved in competing projects across the world.
  • Finally, many potential international investors have placed heavy emphasis on the need for Zimbabwe to crack down on the epidemic issue of historic corruption, deep-rooted within the country. Further emphasis was placed on more tangible factors such as an out-of-date mining code and uncertainties over the fiscal regime which also need to be addressed.

So what’s the solution?

At the conference many investors suggested that once the government organised itself and made steps to crack the institutionalised corruption the investment will surely follow.

At this stage, Zimbabwean projects should look towards traditional sources of financial investment to reboot the industry. This includes the equity markets in London, Canada, Australia and elsewhere, as well as debt financing from development financial institutions, other official lenders and commercial banks.

Another option flagged at the conference was the role of SMEs within the country – it was widely believed that their role would be invaluable in getting the country back on its feet. However, some difficulties will lie in making these businesses attractive to offshore investors, so for now much will depend on the increased liquidity in the local market as well as funds from international and Africa-based agencies.

Whilst the conference has highlighted the crucial issues within the Zimbabwean mining industry, the future is something to get excited about.

Investors need to see the tap being turned on to tackle corruption and update the mining code to encourage business. If investors can see some of the issues discussed at the conference being addressed with proposals which have definitive targets and can then see some concrete results then Zimbabwe will certainly benefit.

This article was originally published in Mining Review Africa.