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Zambian opportunity for Zim mining suppliers

JOHANNESBURG — Zimbabwean companies in the mining supplies sector are being encouraged by the country’s national trade development and promotion organisation ZimTrade, to take advantage of opportunities in the Zambian market.

In May this year, ZimTrade conducted a market survey in Zambia, which indicated that vast opportunities were identified in the processed foods and mining supplies sectors.

Subsequently, the organisation facilitated the participation of companies at this year’s CAMINEX trade expo, held in Kitwe, Zambia, in June.

The expo is the only mining, agricultural and industrial trade expo that takes place in the Copperbelt region.

When responding to ZimTrade’s market survey, buyers of some of the leading mines revealed that capital plant equipment for comminution, such as primary and secondary crushers, flotation
cells, gearless drives, grinder mills, classifiers and concentrators, have a ready market in Zambia.

Other capital plant equipment required includes separators, material-handling feeders, mine ventilation, draglines, tyres, mining support vehicles, drills, earth-moving equipment and
power-generation equipment. 

“Some of the buyers also enquired about suppliers of electrical equipment and consumables, such as transformers, electric motors, cables, batteries, ventilation fans and general
electrical consumables,” said ZimTrade. 

With regard to exploration, companies expressed interest in structural steel and cement, as well as aluminium powder, ammonia, anodes and cathode, caustic soda, coal and cobalt
sulphate.
There is also scope for outsourced labour, such as management advisory, legal, marketing, banking and finance, security and cleaning services.

Other services with potential include transport, plant maintenance, engineering, instrumentation, environmental management and artisanal services, such as quantity surveying.

The Zimbabwe National Industrial Development Policy (2019 to 2023) was also launched in June, which, among other avenues, looks to the export sector as a key growth area for economic
revival.

This is a welcomed development in light of the African Continental Free Trade Area (AfCFTA) agreement, which came into force on May 30 this year, said ZimTrade.

“Local exporters are encouraged to take advantage of this opportunity and prepare for the access markets that will be available through the AfCFTA agreement,” notedthe organisation.

With Zimbabwe having a population of 17 million and a gross domestic product per capita of $1 552, there is a potential for the country to grow its exports from the current $67 million.

In 2018, Zimbabwe exported products worth $66 million against imports of $177 million, leading to a trade deficit of $111 million.

Zambia is among the top five export markets for Zimbabwean products. According to statistics from the Zimbabwe National Statistics Agency, Zimbabwe accounts for less than 5% of Zambia’s
total import bill, despite the proximity of the countries.

Zambia is strategically positioned as a gateway into the central African markets, such as the Democratic Republic of Congo, Angola and Central African Republic, and is one of the key
markets in the Southern African Development Community (Sadc) for businesses looking to increase brand awareness, generate new ideas and form new partnerships, explains ZimTrade.

Zimbabwe and Zambia are also members of the Sadc protocol on trade and the Common Market for Eastern and Southern Africa (Comesa).

The Sadc protocol is an agreement between Sadc member states to reduce customs duties and other barriers to trade on products from one another.

By January 1, 2008, most customs duties (on 85% of tariff lines) had been eliminated for goods originating from Sadc member States, while Comesa implemented the Simplified Trade Regime
to help small traders benefit from the preferential rates enjoyed by commercial traders when importing or exporting goods within the Comesa bloc.

However, Zimbabwe’s proximity to Zambia and its being a member of Sadc and Comesa are not reflected in its export volumes which represent less than 2% of Zambia’s total import bill,
according ZimTrade’s Zambia market survey.

“Zambia is endowed with various mineral deposits. Copper, cobalt, lead and zinc are the most developed. Other minerals found in Zambia include gold, nickel, iron and uranium,” stated
the survey.

The country has about 6% of the world’s known copper reserves, but its government is eager to diversify into other economic activities to reduce the country’s dependence on copper.

“Considered as one of the most attractive destinations for investment in Africa, the sectors deemed to be the most profitable for investment and currently prioritised by the Zambian
government are agriculture, manufacturing, energy, tourism and mining,” highlighted the survey.

Mining is a growing sector in Zambia, with several projects being commissioned every year, especially in the Copperbelt.

Investments in new Zambian mining projects are expected to reach about $15 billion by 2020.  

Subsequently, the mining sector presents opportunities for mining equipment, components and ancillary services to the mines.

“Penetrating Zambian mining sector also offers further opportunities in downstream activities that the mines support. For example, most mines run hospitals, schools and training
centres. These institutions also present downstream opportunities which local suppliers should consider exploiting,” said ZimTrade.

Its Zambia market survey recommends a redoubling of efforts by Zimbabwean companies to take advantage of and benefit from the growth of the Zambian economy.

The survey further suggests that Zimbabwean businesses adopt a medium to long-term strategic approach if they are to enhance returns and develop beneficial relationships with their
Zambian counterparts.

“To increase their chances of winning tenders for Zambian mines, it is important that Zimbabwean exporters consider establishing operations in Zambia. This is because most buyers tend
to seek quotations from local suppliers before importing mining supplies,” ZimTrade concluded.

Mining Weekly

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