Zimbabwe will soon launch a new mining policy targeting to grow the industry to $17 billion by 2030, driven by a wave of foreign investments that will see a jump in production at existing operations and the development of new mines.

According to highly placed official sources, the medium-term mining blueprint lists gold, platinum, coal, coal bed methane (CBM), chrome and lithium as the key drivers of this growth that has potential to have positive spinoffs to the entire economy.

This comes as President Mnangagwa said during the signing of a $1 billion mining and power deal between Zimbabwe and China on Monday that the country was exploring possibility of stainless steel production in line with beneficiation of minerals.

The President has declared mining and agriculture as key drivers of the country’s future economic development.

Zimbabwe generates about 65 percent of its foreign currency from mineral exports and contributes 8 percent to the country’s Gross Domestic Product

At $17 billion, the country’s mining industry will have grown to more than the current size of Zimbabwe’s gross domestic product (GDP) estimated at $14 billion.

‘Very realistic’

“It may sound too ambitious, but it is very realistic given the growing interest from investors spurred by government’s positive attitude towards attracting investments following years of isolation,” said one senior official who asked not to be named as the government was still working on finalising the document.

“It is a detailed document, which shows the contribution of minerals identified to anchor this growth. But more important are the spin offs the country will enjoy from this boom.”

Mines and Mining Development Minister Winston Chitando, confirmed the development but declined to get into finer details.

“I can confirm that the policy document has been crafted, which will provide the direction that the mining industry will take during the next decade or so. It will be launched by His Excellency (President Mnangagwa) in three weeks’ time,” he said.

Endowed with more than 40 mineral resources, Zimbabwe has for years been unable to attract meaningful investment into the economy largely due to red tape, costly corruption and empowerment policies, which scared away investors.

Flood of foreign investors

Zimbabwe is now attracting the global attention following the coming in of the new dispensation, which has continuously pledged to review processes of facilitating investment inflows.

The country has the world’s largest platinum and chrome deposits after South Africa.

Preliminary studies have also shown that the country—with adequate investments–could become a leading player in lithium production and coal bed methane.

Zimbabwe’s untapped coal bed methane resources has excited investors and early this week, the country signed a $1 billion deal with Sinosteel Corp, that will see the Chinese firm building a 400 megawatt coal bed methane power plant in Matabeleland North.

Under the deal, Sinosteel will also construct three ferrochrome furnaces—two in Zvishavane and one in Kwekwe where its local unit, Zimsaco the country’s largest smelter.

Zimbabwe’s open for business mantra — supported by mining reforms and measures being implemented for making it easier to do business in the country — has rejuvenated investor interest in the country with foreign direct investment commitments now totalling $11 billion since President Mnangagwa took over in November last year.

The materialisation of these investment commitments is expected to boost economic development needed to create jobs and boost incomes. President Mnangagwa says Zimbabwe will become a middle income economy by 2030.

Untapped minerals

Analysts see investor interest growing exponentially on the back of reforms of Zimbabwe’s empowerment law, previously applicable to all minerals—but now limited to diamond and platinum and allowing majority ownership by foreigners.

“The investors are warming up to the point they are willing to go beyond investing in non-traditional minerals,” Dr Gift Mugano, an economist with the Zimbabwe Ezekiel Guti University told Business Weekly.

“There are chances that we will receive investments in areas that have never been exploited or in minerals that have never been sufficiently exploited,” he added.

“I think the $17 billion target is conservative as this industry has the potential to be a $50 billion economy.”

However, addressing infrastructure gaps would be critical to make the sector competitive.

“The tone has been set and investors are warming up,” Isaac Kwesu, the chief executive of the Chamber of Mines said. “But this also depends on how competent we are in addressing issues to do with constraints in electricity supply, upgrading the transport system as a way of addressing cost of doing business,” Kwesu said.