zimbabwe - MineAfrica

ZIMBABWE THE OUTLOOK FOR THE MINING INDUSTRY AFTER THE 2013 ELECTION ZIMBABWE: THE LIGHT AT THE END OF THE TUNNEL? •  Zimbabwe became the emblemaEc bad news story for foreign investors in Africa •  There have been many false alarms, but now there does appear to be change in the air •  In the short term, it is possible that poliEcal normalisaEon and avoidance of a banking crisis will create a more stable investment environment •  More likely is a turbulent short to medium term but in the longer term Zimbabwe could conceivably replace South Africa as the stable economic hub of southern Africa ZIMBABWE’S MINERAL WEALTH POLITICAL TIMELINE 1999 2002 2000 Movement for DemocraEc Change is formed (MDC). Mugabe secures another term in flawed elecEons. Squa\ers invade white-­‐
owned farms. ExpropriaEons lead to food shortages and economic meltdown. 2003 2009 2008 MDC claim victory in parliamentary and presidenEal polls. The IndigenisaEon and Economic Empowerment Act is passed and the Mines and Minerals Act amended. Violent a\acks on MDC supporters and leadership follow general strike. MDC splits following decision to boyco\ elecEons to the new Senate. 2013 New consEtuEon is approved. ElecEons with some irregulariEes and li\le violence return Mugabe as President. Government of NaEonal Unity is formed with Tsvangirai. ZANU PF – LAST MAN STANDING Zanu PF is at its most relaxed, having outmaneuvered: •  The MDC •  White Farmers •  The BriEsh No-­‐one leb to fight? POLITICS & MINING •  The twilight of Mugabe’s era -­‐ a post-­‐elecEon window of opportunity •  Zimbabwe’s potenEal as one of the most a\racEve investment desEnaEons •  But financial crisis could spur a new poliEcal crisis and famine “The mining sector will be the centrepiece of our economic recovery and growth.” President Mugabe 2013 INDIGENISATION •  The IndigenisaEon and Economic Empowerment Act 2008 •  The abrasive Saviour Kasukuwere •  Enter Francis Nhema? “Now that the people of Zimbabwe have granted us a resounding mandate in the governance of the country, we will do everything in our power to ensure that our objec?ve of total indigenisa?on, empowerment, development and employment is realised.” President Mugabe 2013 CHINESE WHISPERS Zimbabwe’s Look East Policy In 2012 China’s $583m investment in mineral extracEon reportedly represented 62% of the total FDI approvals for the enEre mining sector.* Top 5 FDI sources for projects approved Jan to Sept 2013* Investment [$ million] 350 300 250 200 150 100 50 0 CHINA (*Source: Zimbabwe Investment Authority) RUSSIA SOUTH AFRICA UK MAURITIUS MAJOR RISKS IN THE YEAR AHEAD – SUCCESSION The Joyce Mujuru FacEon The Emmerson Mnangagwa FacEon MAJOR RISKS IN THE YEAR AHEAD – LIQUIDITY CRISIS •  DomesEc banks face collapse •  Manufacturing stagnant •  Imports growing faster than exports WWW.K2INTELLIGENCE.COM United Kingdom Albemarle House 1 Albemarle Street London W1S 4HA +44 207 016 4250 United States 845 Third Avenue 4th Floor New York, NY 10022 +1 212-­‐694-­‐7000 Spain Calle Almagro 15, 5ª 28010 Madrid, Spain +34 91 319 2419