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Johannesburg - The Industrial Development Corporation (IDC), a government-owned bank, is considering investing in mining projects in Zimbabwe and said listed and private mining companies were thinking the same.
"There are a lot of opportunities from which we could take advantage," said Abel Malinga, head of mining and beneficiation at the IDC in an interview. "But it would depend on the situation improving."
Zimbabwe is locked in power-sharing talks involving long-standing president, Robert Mugabe and his Zanu-PF party, and the Movement for Democratic Change (MDC) which is headed by Morgan Tsvangirai and which claims to have won the country's election earlier this year.
Against this background, inflation has soared to more than 231 million percent, according to a report by The Herald, a newspaper in Zimbabwe, on October 9. Foreign investment has all but dried up, mainly because sovereign and political insurance has been removed, including that offered by the World Bank.
"A policy requirement of ours is that we must invest where there's political insurance," said Malinga. Not even the South African government-backed Export Credit Insurance Corporation is able to offer cover.
However, a number of large and small cap JSE-listed mining companies, and foreign companies, have spoken to the IDC about positioning for investment in Zimbabwe's coking coal fields, which are extensive, Malinga said.
"There's a lot of interest from SA," he said. "Empowerment firms, some large, some listed. Offshore companies are also looking to have the IDC as a partner in Zimbabwe's mining sector."
Malinga estimates Zimbabwe's coking coal reserves are comparable in size to the steam coal reserves of the Waterberg. Positioned in SA and Botswana, the Waterberg is estimated to contain 50 billion tons of coal. In addition, Zimbabwe has platinum available for exploration, iron ore, chrome, zinc and nickel, said Malinga.
"Their coal is suitable for industrial use while infrastructure is still relatively good. But we'd look at projects that could have a quick turnaround and that would help kickstart the Zimbabwean economy," Malinga said.
"It's very frustrating as we see so much opportunity. But right now, our hands our tied."
- Fin24.com