THE mining industry requires more than US$3,8 billion over the next five years to achieve full capacity as well as fund expansion projects.
According to a State of the Mining Industry survey report 2015, conducted by Nu Times Innovations through facilitation and sponsorship from the Zimbabwe Chamber of Mines, the sector is encountering difficulties in raising the requisite capital to ramp up production.
“Of this, US$1,2 billion is required for ‘stay-in-business’ while US$2, 6 billion is for developmental investments,” reads part of the survey.
Platinum requires US$2,8 billion to produce 22 tonnes annually by 2020 while gold requires US$600 million to produce 30 tonnes, coal requires US$420 million to produce 18 tonnes, chrome requires US$38 million to produce 1,3 million tonnes and nickel requires US$28 million to produce 27 tonnes.
Shortage and high cost capital was ranked the number one factor undermining sector viability followed by low commodity prices and high cost of power.
“About 90 percent of the respondents reported that they encountered difficulties in raising the requisite capital for staying in business or ramping up production in 2015.
“62 percent of these respondents said that they were using antiquated and inefficient equipment,” says the survey.
The Chamber, however, projects the sector to grow by 1,6 percent this year on the back of improved production.
The survey indicated that 30 percent of local miners were optimistic, indicating they expected growth to be between one and four percent while 20 percent said they expected the sector to grow by more than five percent.
About 40 percent of local mining companies surveyed said they expected the sector to post a negative growth while 10 percent of local miners said the output projection would remain flat.
The mining sector prediction comes after Finance Minister Patrick Chinamasa, in his 2016 National Budget, forecasted that the sector would grow by 2,4 percent in 2016 buoyed by increased output in  gold, chrome, coal, nickel, platinum and diamonds.
The average grade for the mining industry fell across most minerals from 2014 to 2015 due to possible lack of investment in development (and exploration) over the years.
“Profitability for the mining industry has declined across most minerals, with most respondents recording losses during the period under review,” the survey showed.
The survey which was released last week showed that only gold and platinum recorded growth in 2015, with the rest showing declines.
Zimbabwe has over 40 minerals but only five, gold, platinum, palladium, diamonds and nickel, account for 90 percent of revenue, the report showed.
Gold output rose 30 percent to 20 tonnes and platinum marginally gained by one percent to 12,5 tonnes.
Copper remained flat at 8,2 tonnes while chrome output fell 48 percent to 210 000 tonnes, the steepest decline.
Revenue from chrome decreased by 47 percent to $21 million after recording a 48 percent decline in output to 210 000 tonnes.
Diamond revenue was down 46 percent to US$180 million following a 30 percent decrease in output to 3 360 carats.
Platinum registered a 23 percent decrease in revenue to US$381 million while nickel recorded a 30 percent fall in revenue to US$142 million after a three percent decline in output to 16 108 tonnes.
Revenue from gold sales grew by a fifth to US$737 million.
The mining sector output has been recording negative growth at -3,4 percent in 2014 and -2,5 percent in 2015, but the study also showed that the value of mineral output also mirrored the decline in output, falling by 13,1 percent in 2015 due to low output and subdued prices.
According to a World Economic Forum (WEF) report released earlier this month, all Zimbabwean mining companies must brace for a further dip in commodity prices on the international market this year.
It indicated that despite having had a tough year in 2015 commodity prices for everything, from crude oil to industrial metals such as iron ore and copper plummeted even further by the close of last week.
Due to this situation, the world’s mining giants have been forced to restructure their businesses in order to stay afloat as they battle declining profits.
The market capitalisation of the top 40 global mining companies fell by nearly US$300 billion in 2015.