Players in the mining industry are upbeat about the upcoming year with plans to invest more into operations buoyed by positive outlook on the commodities market come 2020 but uncertainties on the country’s political arena have cast a shadow of pessimism, 263Chat Business can report.
In the latest Zimbabwe State of the Mining Sector Survey Report, mining executives anticipated profitability in the coming year despite several bottlenecks that affected operations this year which included energy shortages, new currency reforms and capital constraints.
“Survey findings show that mining executives are slightly more confident about investment plans for 2020. Confirming the above, about 60 percent of respondents indicated that they are planning to inject capital in 2020 while 20 percent of respondents are not expecting to inject capital in their business,” stated the report.
Analysts have attributed this to ongoing investment plans and commitments already inked which are slated for 2020.
On the commodities market, there is a generally positive sentiment that global demand for commodities could improve as trade tensions between the two global economic giants, China and the US are expected to wane.
“About 70 percent of respondents indicated optimism about the commodity market in 2020, while 10 percent are anticipating an unfavorable market outlook. Approximately 20 percent of respondents are expecting the market conditions to remain the same as in 2019,” it further states.
But on the flip side, there is less optimism over the general macro-economic environment in the country in 2020.
“Mining executives are slightly less confident about their prospects to raise capital in 2020, with 60 percent of respondents indicating that access to capital will be somewhat worse in 2020, while 20 percent are anticipating access to capital to improve in 2020. About 20 percent expect the situation to remain the same as in the previous year,” it stated.
Political uncertainties are also a major worry for miners.
“Mining executives remained slightly less confident about the political situation in the country, with 60 percent of respondents expressing pessimism about political and country risk, while 20 percent indicated that they are positive about the political situation in the country,” the report showed.
Zimbabwe’s mineral wealth remains largely untapped due to shortage of capital to unlock production and authorities have a torrid task to iron out other pressing issues that have affected production in the sector in 2019 that include the largely unpopular foreign currency retention scheme and plugging leakages from the artisanal miners among other notable challenges.