BMI View: Zimbabwe's mining industry will grow steadily in absolute terms over our forecast period through to 2020 as production increases across the key platinum and diamond mining sub-sectors .
|e/f = BMI estimate/forecast. Source: UN Data, BMI|
|Mining Industry Value, USDbn||1.10||1.00||1.10||1.10||1.10||1.10|
|Mining Industry Value, USDbn, % y-o-y||-5.70||-1.74||3.13||3.69||1.38||0.93|
Latest Developments & Structural Trends
Zimbabwe is richly endowed with deposits of chrome, gold, nickel, diamonds and platinum, among other minerals. Its gold reserves are among the largest in Africa, while it has the world's second-largest platinum reserves. Diamond reserves are measured to be the second-largest globally after Russia. Development in these key markets together with a gradual more stable political and economic climate has seen the country's status as major global producers strengthen in recent years. In terms of overall output, Zimbabwe is challenging the world's largest platinum producers, Russia and South Africa, while a recent reduction in taxes for smaller gold miners will see production rise at almost a double-digit rate this year.
The mining sector will nevertheless face increasing challenges to its current growth trend, however. Political and economic risk remains a particular concern from both a regulatory and investment point of view and the ZANU-PF will continue to spell trouble for the future of the industry.
Zimbabwe is posed to challenge Russia and South Africa as the world's leading platinum producer over the coming years as new investment by both existing and new players allows the country to capitalise on its considerable reserves, which are the second largest in the world. Coincidentally, the country will see its status lifted by slowing production growth in neighbouring South Africa, where serious difficulties as a consequence of labour unrest and high energy costs will mean that the world's largest platinum producer will experience major difficulties in maintaining production levels.
We forecast Zimbabwe to experience a temporary boost in gold production this year as the impact of a recent reduction in gold mining levies leads to an increase in activity by smaller mining firms. Zimbabwe's gold production rose by 25% during Q115 to 4,180kg, according to the country's Chamber of Mines.
In terms of volume, the African countries for which we forecast production (Angola, Botswana, DRC, Namibia, South Africa, Tanzania and Zimbabwe) to total 4.9 million (mn) carats over our forecast period to 2020, dwarfing other regions' additional output.
While a more consolidated mining landscape may help in raising the country's overall production levels, it remains to be seen the impact it has on deterring foreign investment into the sector. The recent consolidation highlights the government's increasingly hands-on role in diamond extraction and follows the introduction of a black economic-empowerment programme, which requires foreign-owned companies, including mines, to sell 51% of their shares to black Zimbabweans.
The one clear positive for the sector going forward is the recent clearance granted by the Kimberley Process which will allow the countries to restart diamond exports once the issue of conflict minerals from the Marange fields had been addressed. The deposit is estimated to be the largest diamond discovery in the world in more than a century. As such, we expect output to grow from 4.8mn carats in 2016 to 7.9mn carats by 2020, averaging annual growth of 7.5% during 2016-2020.
The Zimbabwe Mining Report has been researched at source and features BMI Research's mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.
BMI's Zimbabwe Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in Zimbabwe.
- Use BMI's independent industry forecasts on Zimbabwe to test other views - a key input for successful budgeting and planning in this mining market.
- Target business opportunities and risks in Zimbabwe's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Zimbabwe.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.
BMI Industry View
Summary of BMI’s key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.
Industry SWOT analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the mining sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
- Mining industry: Industry size (USDmn), real growth (%), % of GDP, employment (‘000), workforce as % of total workforce, average wage (USD).
- Output: Production volumes (‘000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
- Exports: Value of exports (USDmn) for all major metals, minerals, ores and gems mined in each state.
- Commodity markets: Global demand, supply, stocks and benchmark prices (USD) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.
BMI’s Mining Risk Reward Index
BMI’s Risk Reward Indices provide investors (mining companies and support service providers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Competitive Landscape Tables & Analysis
Comparative company analyses and tables detailing USD sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Mining reports are based on an extensive network of primary sources, such as multilateral organisations (UN, WB, IMF), national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.