2021 budget to focus on mining sector investment, sector to shrink 4.1% in 2020

Image: Bloomberg
Image: BloombergImage: Bloomberg

• Amendment of Mines and Minerals Act to be prioritised
• Reopening of closed and new mines critical
• Sector is projected to grow by 7.7% in 2021

Harare – As the country is working towards a US$12 billion mining industry by 2023, government said it will through the 2021 national budget implement a number of measures meant to attract investors and bring transparency to the industry.

In his 2021 Budget Strategy Paper presentation, Finance and Economic Development Minister, Professor Mthuli Ncube said government will prioritise finalising the amendment of the Mines and Minerals Act which is expected to bring market based conducive investment climate providing the stability, consistency, competitiveness and transparency in the sector and also to pave way for the formulation of mineral policies.

Addressing outdated manual cadastre processes, old maps, and unreliable records causing disputes around duplicate holdings and delays in issuing licences also remains outstanding and critical therefore the budget will prioritise exploring innovative financing solutions to enable migration from the current system to a computerised mining cadastre system.

Minister Ncube added that the budget will seek to capacitate the Ministry of Mines personnel in terms of mobility, communication and computerisation to ensure that mining applications are timely processed and inspections can be conducted as the ministry has a backlog of more than 17 000 applications.

Government, through the 2021 budget is also expected to prioritise the reopening of closed and new mines, finalising the Mines and Mineral Amendment Act and harmonisation of mining taxation laws which are critical in ensuring the viability of the sector as well as to review gold marketing conditions and capacitate law enforcement institutions in order to seal leakages that are enabling side marketing of minerals.

Leakages are mainly affecting the gold sector and as a result, the country has been losing a lot of money in export proceeds. The country’s gold deliveries to Fidelity Printers for the three months to September 2020 were 51% and 63% below the same period in 2019 and 2018 respectively due to side marketing, coupled with the effects of the COVID-19 pandemic.

The mining sector is projected to grow by 7.7% in 2021 from a projected contraction of 4.1% in 2020 driven by almost all minerals including gold, PGMs and diamond.

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