HARARE (Zimbabwe Investor) - It is an incontestable verity that Zimbabwe has the second largest platinum reserves after South Africa, has more than half of the world’s known chromium reserves and boasts unexplored deposits of ferrochromium, chrysotile asbestos and diamonds.

In 2002 the mining Zimbabwe’s leading industry contributing 27% of export trade. Ironically, despite concerted measures to reap the benefits of such endowment, the country is failing to harness the rewards of exporting such minerals as red tape and mismanagement take centre stage at the Ministry of Mines and Mining Development.

At present, the government anticipates a 30% growth rate in the mining sector. The mining sector only began to show signs of recovery after the formation of the inclusive government last year as well as the adoption of the multiple currency system. Further alleviating the situation was the scrapping of forced foreign exchange surrender requirements to the RBZ and the full retention of export proceeds. A 78% production figure was last realized in the sector in 1998.

It remains to be seen how an envisaged 24.6% increase in gold production will be achieved in light of power shortages, dilapidating machinery and undercapitalization in the industry.

Meanwhile in the 2010 national Budget, Minister Biti announced that he would peg application and renewal fees for Exclusive Prospective Orders (EPOs) and Special Grants at US$100,000. This move has not gone down well with local investors who perceive such fees as prohibitive and favouring the heavily capitalized foreign companies.

For example the cost of an EPO in South Africa is the equivalent of US$800, Mozambique US$100 while in Namibia it is free.

An EPO confers the exclusive right to prospect for specified minerals in any defined area in Zimbabwe as one will then have to apply for a mining license afterwards, which already has its own charge.

The Mines and Mining Development Ministry is still yet to issue out EPOs and Special Grants applied for in 2001 by other companies. The delay in approval of EPOs will certainly serve to deter foreign direct investment in the mining sector.