NEARLY 90% of raw materials and consumables used by the mining sector are being sourced offshore, an indication that the local manufacturing sector is in the doldrums, Industry and Commerce deputy minister, Rajeshakumart Modi has said.
Addressing delegates attending the Mining Industry Suppliers Forum held in Bulawayo on Wednesday, Modi said the local manufacturing industry was failing to satisfy demands of the mining sector.
“I am informed that the mining sector is a key industry, contributing approximately 8% to the country’s gross domestic product. There is potential for local manufacturers to supply mining equipment and raw materials such as conveyor belts, hoses, grinders, crushers, explosives and prospective clothing,” Modi said.
“However, evidence is showing that approximately 89% of raw materials and consumables used by the sector are being sourced offshore. Eleven percent of the imports can be produced locally, presenting a wide opportunity for local manufacturers.”
Modi said the deindustrialisation experienced in the economy has resulted in most local suppliers in the industry failing to supply mining houses on time due to capacity constraints, and unreliability of supply.
In some instances, local suppliers lack capacity to meet the quality required by the mining sector, with miners preferring imports, he added.
“It is important that government, mining houses and suppliers of the mining industry work together to capacitate local suppliers through supplier development programmes, especially under the envisaged local content policy,” he said.
The local content policy, which is under discussion, is aimed at providing guiding principles for the development of local industry through linkages and utilisation of domestic resources.
Key strategies of the policy include funding to capacitate local firms, creating business opportunities for local firms, and provision of fiscal incentives to local firms meeting specified local content threshold.