NiZA and Fatal Transactions published a briefing note on the crisis in the mining industry of Zimbabwe.
The deepening crisis in Zimbabwe’s mining sector has been brewing for several years. Initially the crisis was based in declining production efficiencies and investor wariness due to the country’s rapidly worsening economic climate.
But the sector’s continuing deterioration has since been punctuated by political faction-fights over divested public and private assets, murky deals involving the takeover of mineral producers by quasi-state organisations and more recently, mounting allegations of corruption and smuggling in the diamond and gold sectors. The key factors in mining’s decline lie outside the sector, and have their origins in the security-driven restructuring of Zimbabwean politics and business in the late 1990s and early 2000s. The ensuing economic instability and growing political unpredictability deprived the potentially high-growth sector of the kind of investment needed to sustain and expand existing operations. In this dynamic, working people, rural communities and the poor – including many destitute communities dependent on mining operations – have been among the most profoundly and negatively affected.
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