Mining is a crucial industry in Zimbabwe. It provides foreign receipts, formal employment, and tax revenue, all of which are in short supply.
In 2019, mining provided US$2.9 billion or 55% of total export earnings. So when a lockdown was announced on March 30 in response to the Covid-19, the mining sector was affected. Mines are particularly risky because:
After the initial three-week lockdown, mining and tobacco industries were allowed to begin operations while the rest of the nation faced another two weeks of lockdown. Mines were allowed to open if they could screen their workers and let them stay at their workplace during the extended lockdown period.
The measures to stave of the virus can be monitored and enforced more easily on large mines. It's the small scale miners that would be challenging. Small scale miners produce more than half of mineral production in Zimbabwe. The sheer number of participants, remote locations, harsh working conditions, and low operating margins will make investing in protective gear along with adopting health protocols difficult.
Whether the mining industry will survive, the Covid-19 pandemic is uncertain. Before the lockdown, large miners like Zimasco, Portnex, and African Chrome Fields (ACF) were struggling. The world economy is expected to shrink in 2020, so there could be a fall in mineral prices. Zimbabwean miners and the government may have to wade through these low prices while trying to keep production levels stable without an infection incident. Achieving this will prove complicated.
Stay tuned on this developing story with Exports News.