Miners struggle as commodity slump bites

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ZIMBABWE’S export-reliant mining sector faces mounting pressure as global commodity prices continue to decline.
This trend raises concerns for the country’s economy, which depends heavily on the mining industry for foreign currency earnings.
In a recent interview with The Financial Gazette, Mines minister, Zhemu Soda, acknowledged the severity of the situation, stating, “The mining industry has been affected very much.” Zimbabwe, like many resource-rich nations, has little influence over volatile international markets.
While Minister Soda praised the industry’s resilience, the impact of softening prices is becoming evident.
Zimplats, a major mining company, reported a 32 percent revenue decline in the half-year ended December 31, 2023, directly attributed to lower metal prices.
Economic analysts warn of broader consequences.

Gorden Moyo describes falling prices as a “bad omen,” highlighting Zimbabwe’s limited access to external capital due to its debt burden.
“Zimbabwe largely depends on commodity exports for foreign currency returns.
“Low commodity prices in global markets spell disaster for a country that has limited options for external capital inflows.
“The country has no access to concessional lending due to its failure to service its debts; in fact, Zimbabwe is one of the almost 20 African countries that are debt distressed and are struggling to break the vicious circle of debt,” Moyo said, adding: “Given the cumulative effects of global storms such as the Russo-Ukraine war, climate crisis, the legacy of the Covid-19 global pandemic, and the Israel-Palestine crisis, the commodity prices in global markets will remain volatile”.
Local analyst Prosper Chitambara predicts a worsening trade deficit and pressure on the country’s current account position, raising concerns about the sustainability of the exchange rate and the health of the overall economy.
“We have seen the job labour developments, Hamas is at war, which is going to affect even fuel prices for the foreseeable future. So, it means there is going to be a lot of pressure on our trade position and current account position that will then obviously affect the sustainability of the exchange rate and also of the macroeconomy in general,” Chitambara said.
The mining industry is a cornerstone of Zimbabwe’s economy contributing 13 percent of GDP and over 60 percent of foreign currency earnings.