1

OPPORTUNITIES FOR MINING SECTOR IN ZIMBABWE

PRESENTED BY

ALEX MHEMBERE

Outline

2

What is an opportunity?

Uses of minerals

Mineral Resources of Zimbabwe

Mining industry in Zimbabwe:

- Where from? and Where to?

Contribution of Minerals to Zimbabwe Economy

Opportunities in mining

WHAT IS AN OPPORTUNITY?

3

4

• The Oxford Advanced Learners Dictionary defines an opportunity as ‘a time when a

particular situation makes it possible to do or to achieve something’.

Opportunity is synonymous with: chance, lucky, good timing, right set of

circumstances, suitable moment, opportune occasion, an opening, window (of

opportunity).

In strategic management an opportunity arises when a company can take advantage

of conditions in its external environment to formulate and implement strategies that

enables it to earn higher profits or increase market share.

It is something one has a comparative advantage on, and not necessarily something new.

BIG NOE: AN OPPORTUNITY IS NEVER PERMANENT WHEREAS

OPPORTUNITIES NEVER END!!

USES OF MINERALS

(Pervasive across all forms of human life)5

6

Mining and Metals, Integral to Modern Society

Modern day communication

comes from mining:

Copper: 16 grams

Silver: 0.35 grams

Gold: 0.034 grams

Palladium: 0.015 grams

Platinum: 0.00034 grams

Indium

Titanium dioxide

Indium tin oxide

7

Mining and Metals, Integral to Modern Society

Even where we are or our

houses where we came from

mining is there:

Clay

Steel

Asbestos

Limestone

8

Mining and Metals, Integral to Modern Society

When you relax and watch

Ngezi Platinum or Man U

play, mining is there:

Quartz

Chromite

Copper

Platinum

Gold

Iron

9

Mining and Metals, Integral to Modern Society (Cont’d)

When you enjoy a bit of

luxury

Iron & steel: 900Kg

Aluminium: 120kg

Carbon: 22.7kg

Silicon: 19kg

Platinum: 0.4kg

Nickel: 4.1kg

Chromium: 6.8kg

Manganese: 7.7kg

Zinc: 10kg

Copper 19kg

Plus other trace elements

10

Even a bright smile comes from mining …….

Silica

Limestone

Aluminium

Phosphate

Fluoride

Titanium

Mica

Petroleum

11

…. And human beings conaume and have lots

of minerals!!

MINERAL RESOURCES OF ZIMBABWE

12

Many Cities & Towns owe their origin & existence to mining

13

Hwange

Mutare

MhanguraBindura

Shamva

Kwekwe

Zvishavane

Shurugwi

RencoGwanda

Kadoma

Redcliff

Shangani

Kamativi

Bikita

Mining industry in ZimbabweWhere are we coming from?

Where are we?

Where are we going?14

15

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

1,800.00

2,000.00

-

5,000

10,000

15,000

20,000

25,000

30,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Pro

j

Pri

ce (

US$

/ou

nce)

Pro

duct

ion

(Kg)

GOLD PRODUCTION vs PRICE

PRODUCTION PRICE

16

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Proj

Pri

ce (

US$

/ou

nce)

Pro

duct

ion

(Kg)

PLATINUM PRODUCTION vs PRICE

PRODUCTION PRICE

17

-

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

e

Pri

ce (

US$

/M

ton)

Pro

duct

ion

(Ton

s)NICKEL PRODUCTION vs PRICE

PRODUCTION PRICE

18

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

e

Pri

ce (

US$

/M

ton)

Pro

duct

ion

(Ton

s)COAL PRODUCTION vs PRICE

PRODUCTION PRICE

19

-

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

200.00

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Pri

ce (

US$

/M

ton)

Pro

duct

ion

(Ton

s)IRON ORE PRODUCTION vs PRICE

PRODUCTION PRICE

20

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

e

Pri

ce (

US$

/K

g)

Pro

duct

ion

(Ton

s)CHROME PRODUCTION vs PRICE

PRODUCTION PRICE

21

0

200

400

600

800

1000

1200

1400

1600

1800

2000

-50,000

-

50,000

100,000

150,000

200,000

250,000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

e

Pri

ce (

US$

/M

ton)

Pro

duct

ion

(Ton

s)ASBESTOS PRODUCTION vs PRICE

PRODUCTION

0

2000

4000

6000

8000

10000

12000

14000

2009 2010 2011 2012 2013 2014 2015 2016 2017proj

Diamonds '000 carats

Mining Contribution to Zimbabwe Economy

23

Zimbabwe Value of Mineral Exports since 2009

0.5

0.7

0.9

1.1

1.3

1.5

1.7

1.9

2.1

2.3

2009 2010 2011 2012 2013 2014 2015 2016 2017 Proj

US$ Billion

Contribution to Total Mineral Exports

1993-2003 (%) 2004-2011 (%) 2012 - 2015(%) 2016

Gold 57.3 24.2 31% 48%

HCFeCr 20 10.7 8% 6%

Nickel 15.1 11.0 7% 7%

PGMS* 2.3 46.1 28% 33%

Diamonds 0.8 6.7 20% 5%

Others 6.8% 1.3% 6% 1%

25

RBZ, MOF, Zimstats

Exports by Category

2016 mining contribution by the numbers

26

Number of EMPLOYEES in mining GDP contribution

Minerals REVENUE generated

Mining FOREIGN CURRENCY

earnings as a percent of national exports

Mining FDI attraction as a percentage of

total national FDI receipts

Contribution to the FISCUS through taxation LOCAL PROCUREMENT of

products & services in mining

Mining spend towards CSR as a

percentage of revenue generated

Source: Chamber of Mines

of which

Top 10 Minerals and their contribution: More than 88% of the value of mineral output in 2016 was accounted for by 4 key minerals

(gold, platinum, palladium and nickel), with gold constituting 48% of total revenues.

48%

22%

11%

5%

7%4% 3%

Gold Platinum Palladium Diamond Nickel Coal Other

MINING OPPORTUNITITIES

28

Employment

29

Greenfield

30

In excess of 60 minerals known to exist

40 Minerals being extracted now or before

4 minerals contributing 88% of revenue

Plenty Opportunities!

Resuscitation & Organic Growth

31

Tin - Kamativi

Iron Ore and Steel - ZiscoSteel

Copper - Mhangura Mine

Ferrochrome Zim Alloys & Zimasco

Coal

Asbestos

Expansion & Growth all Mines!!!

Mergers & Acquisitions

32

Small scale and artisanal miners

Juniors

Majors

Conglomerates

OPPORTUNITIES GALORE

Value Addition and Beneficiation

33

PGMs: Smelters and refineries

Chrome: Smelters

Nickel: Smelters and refineries

Diamonds: Cutting and polishing

Iron Ore: Steel manufacture and fabrication

34

Trading in Mineral Stock Exchanges - LME.

Capital Raising & Trading

Mineral Stock Exchange -Toronto

35

Industrial Linkages

Supply of services, e.g. Auditing, Advisory, catering engineering

medical, etc etc.

Supply of capital goods and consumables

Construction,

Power,

Chemical

Explosive

Oils & Lubricants

Fuels

Sustainability

36

Local Enterprise Development

Corporate Social Investment

Indigenization and economic empowerment

Environment and sustainable mining

How Do we identify Opportunities

37

Several Processes & Models available

Personal Networks

Harvard 5Cs Model:

Circumstance, Context, Constraints, Compensating behaviours, Criteria.

Linda Kazares 7-Step Model

Focus on core product

Keep your pitch simple

Stay true to who you are

Map it

Utilize marketing tools that work best for you

Develop a plan of action

Execute

- Do what works for you

- Do what creates value38

39

THANK YOU

.