BY VENERANDA LANGA
CHAMBER of Mines chief executive Isaac Kwesu yesterday said the high cost of electricity coupled with massive power outages will drastically affect output and growth in the mining sector.
Kwesi made the remarks while appearing before the Parliamentary Portfolio Committee on Mines where he was contributing towards the 2020 budget proposals for the Ministry of Mines.
He also said the mines sector was experiencing skills flight where engineers, geologists and other pertinent staff were increasingly relocating to other countries due to poor remuneration locally.
“Electricity is very critical in mining and whilst we appreciate that government is ensuring that mining gets dedicated power, mining companies have been paying Zesa for electricity in advance but they are still experiencing power outages – and without power there is no production and we appeal for Parliament intervention on this,” Kwesu said.
“There is a new development that miners should pay for electricity, royalties and taxes in foreign currency based on 50% retention, but now that Zesa has to be paid in foreign currency there is need for additional ability to do so because diamond royalties for example are 50%, and then electricity takes up 35%, and at the end there will not be sufficient foreign currency to import the critical raw materials that are required for growth of the mining sector,” he said.
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Zimbabwe Miners Federation (ZMF) president Wellington Takavarasha proposed that the Ministry of Mines must establish gold service centres, and a grant to support small-scale miners which should be administered by his organisation.
MPs complained over declining output saying the Ministry of Mines was pivotal for feeding revenue into the fiscus.
But Mines ministry deputy minister Polite Kambamura refuted the claims saying government actually recorded 70% exports from January 2019 to mid-year, which is US$388 million.
“We actually are one of the top performers in revenue feeding into the fiscus,” he said.
Bikita West MP Elias Musakwa immediately shot back saying: “How can you reconcile good performance with declining performance which was tabulated by the Reserve Bank of Zimbabwe in its monetary policy statement?”
The MPS said there was a 90% decline in mineral output compared to last year.