Zimbabwe Mining Report Q4 2016

Date: September 21, 2016
Pages: 53
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)

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Includes 3 FREE quarterly updates

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.

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.
BMI Industry View
  Table: Zimbabwe Mining Industry Value
Latest Developments & Structural Trends
Industry Forecast
Platinum: Growth To Remain Positive
Latest Developments
  Table: Platinum Production (Zimbabwe 2014-2020)
  Table: Zimbabwe - Major Platinum Projects
Structural Trends
Refinery Decision Finally Made
Gold: Juniors To Drive Output
Latest Developments
  Table: Gold Production Forecast (Zimbabwe 2014-2020)
  Table: Key Gold Projects In Zimbabwe
Structural Trends
Diamonds: Significant Growth Potential, Despite Unfavourable Environment
Latest Developments
  Table: Diamond Production (Zimbabwe 2014-2020)
Structural Trends
Industry Risk Reward Ratings
Zimbabwe - Risk/Reward Index
Industry Rewards
Country Rewards
Industry Risks
Country Risks
Africa - Risk/Reward Index
Key Takeaways
Latest Revisions
  Table: Africa - Mining Risk/Reward Indices
Regulatory Development
Regulatory Underperformance
Trade & Investment Risk Analysis
Commodities Forecast
Commodities Outlook
  Table: BMI Commodities Price Forecasts
Competitive Landscape
  Table: Southern Africa - Largest Listed Mining Companies
Company Profile
Global Company Strategy - Impala Platinum - Q3 2016
Company Strategy
  Table: Impala Platinum - Key Financial Data
Regional Overview
Sub-Saharan Africa Overview
  Table: SSA - Government Involvement In Mining Sector
Industry Forecast Methodology
Risk/Reward Index Methodology
  Table: Weighting Of Indicators
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