Why this executive is bullish on Zimbabwe’s mining sector

The mining industry in Africa, known for its vast potential, is currently experiencing a period of uncertainty due to geopolitics, particularly the ongoing trade war initiated by the United States. Jacque Botha, Chairman of Afriforesight, highlighted the impact of the trade war on the mining sector, stating that forecasters have had to constantly adjust their models due to the unpredictable nature of the situation. With Trump's shifting alliances and trade policies, the markets have been volatile, with different regions experiencing varying degrees of growth. Trump's recent collaboration with Europe against China has led to a rise in European and American stock markets while Chinese markets have faced a decline. However, despite the challenges posed by the trade war, China remains a key player in the mining industry, with a projected growth rate of 6.6% this year and 6.4% next year. China's focus on infrastructure spending has boosted demand for commodities such as steel, manganese, and iron ore, benefiting mining sectors globally. Furthermore, with China now seeking alternative sourcing from Asia due to the trade tensions, there is a potential for growth in the region's manufacturing sector, thereby driving demand for raw materials. Additionally, China's Belt and Road initiative has further stimulated the mining industry, creating opportunities for commodity producers worldwide. In light of these developments, Botha emphasized a positive outlook for commodities in Africa, excluding coal due to declining demand, but with potential in other sectors. Specifically, for Zimbabwe, there are promising opportunities in the mining economy. Botha mentioned the revival of old mines, such as Wankie and the gold mines, presenting a chance for increased production. As the second-largest chrome producer in the region, Zimbabwe holds significant potential in the sector. However, challenges like the 50% ownership rule have deterred investors from fully exploring these opportunities. Botha highlighted the need for Zimbabwe to address such regulatory hurdles to attract more foreign investment. The upcoming elections in Zimbabwe offer a window for policy reforms that could make the country more competitive in the mining industry. The potential relaxation of ownership requirements could significantly boost investor confidence and spur growth in the sector. Overall, there is optimism regarding the future of Zimbabwe's mining industry, with the potential for substantial growth and development.