DETERMINANTS OF DETERMINANTS OF MINING INVESTMENT: A MINING INVESTMENT: A

CASE STUDY OF THE CASE STUDY OF THE ZIMBABWE MINING ZIMBABWE MINING

SECTORSECTORLyman Mlambo, Institute of Mining Research, University of Lyman Mlambo, Institute of Mining Research, University of

Zimbabwe.Zimbabwe.

Presentation at the UNCTAD Workshop on the Teaching, Presentation at the UNCTAD Workshop on the Teaching, Research and Policy Design of Natural Resources and Research and Policy Design of Natural Resources and

Economic Development , July 12-16, 2010, Dar-es-Salaam, Economic Development , July 12-16, 2010, Dar-es-Salaam, TanzaniaTanzania

Presented on 13 July, 2010.Presented on 13 July, 2010.

ORGANIZATION OF PRESENTATIONORGANIZATION OF PRESENTATION

Background – brief reference to theory to shape Background – brief reference to theory to shape thoughtsthoughts

Overview of the mining sector in ZimbabweOverview of the mining sector in Zimbabwe

Discussion on determinants of mining Discussion on determinants of mining investment in Zimbabweinvestment in Zimbabwe

Results of an estimation modelResults of an estimation model

The Keynesian investment function (Pentecost 2000; The Keynesian investment function (Pentecost 2000; NEPC)NEPC) can be summarised as given below : can be summarised as given below :

Where i= market rate of interestWhere i= market rate of interestββ0 0 = captures exogenous shifts in business expectations, which = captures exogenous shifts in business expectations, which

affect the firm’s rate of returnaffect the firm’s rate of return

Thus, the rate of return and the rate of interest are Thus, the rate of return and the rate of interest are determinants of mining investment.determinants of mining investment.

iI 10

The Accelerator theory of investment (Gujarati 1988; Dzawanda 1994; The Accelerator theory of investment (Gujarati 1988; Dzawanda 1994; Pentecost 2000)Pentecost 2000)

This theory assumes that there is a desired stock of This theory assumes that there is a desired stock of capital to produce a given output for a given technology, capital to produce a given output for a given technology, rate of interest and so on.rate of interest and so on.

The theory makes three assumptions:The theory makes three assumptions:

where t indicates period t, K*where t indicates period t, K*tt is desired mining capital is desired mining capital stock, Qstock, Qtt is current mining output, K is current mining output, Ktt is current capital is current capital stock, Istock, Igg

tt is gross investment, is gross investment, αα is the depreciation rate is the depreciation rate and and δδ is the coefficient of adjustment. is the coefficient of adjustment.

tt QK 1*

1*1 tttt KKKK

11 tttgt KKKI

By a series of mathematical derivation and By a series of mathematical derivation and manipulations it can be shown that:manipulations it can be shown that:

This function can then be estimated and coefficients of This function can then be estimated and coefficients of the above variables be tested for statistical significance.the above variables be tested for statistical significance.

tgttt

gttt

gt

gt uIQQIQQII 1111011 )1()1(,,

Theoretical Determinants of Investment, as Theoretical Determinants of Investment, as suggested by the foregoing discussion suggested by the foregoing discussion

Project rates of return/internal rate of return Project rates of return/internal rate of return Interest rate Interest rate Current level of outputCurrent level of output Previous year’s outputPrevious year’s output Previous year’s investmentPrevious year’s investment

When one looks at the peculiarities of the mining When one looks at the peculiarities of the mining sector (Gentry & O’Neil 1984; Pearce 1986; Driver sector (Gentry & O’Neil 1984; Pearce 1986; Driver & Moreton 1992; Gocht et al 1988), the following & Moreton 1992; Gocht et al 1988), the following factors can be added:factors can be added:

Risks - market risks and political risks Risks - market risks and political risks Uncertainty.Uncertainty.

Poindexter (1976), also suggests the Poindexter (1976), also suggests the following:following:

Credit rationing or availability Credit rationing or availability Cash flow – empirical evidence exists Cash flow – empirical evidence exists

that investment is positively related to that investment is positively related to cash flow. cash flow.

This list is certainly not exhaustive, This list is certainly not exhaustive, but we can use it for analysis. but we can use it for analysis.

AN OVERVIEW OF THE MINING AN OVERVIEW OF THE MINING SECTOR IN ZIMBABWESECTOR IN ZIMBABWE

IntroductionIntroduction Currently there are more than forty different types of Currently there are more than forty different types of

minerals mined in the country. Major among them, in minerals mined in the country. Major among them, in terms of production value, are: gold, asbestos, nickel, terms of production value, are: gold, asbestos, nickel, coal, copper, chrome, tin, iron, silver and cobalt (Central coal, copper, chrome, tin, iron, silver and cobalt (Central Statistical Office, CSO). Statistical Office, CSO).

In 1980 Zimbabwe’s proven reserves of chrome were In 1980 Zimbabwe’s proven reserves of chrome were more than half that of the world (more than half that of the world (Mining in Zimbabwe Mining in Zimbabwe PamphletPamphlet). See the table below for some reserve ). See the table below for some reserve estimates for ten minerals mined in Zimbabwe (Source: estimates for ten minerals mined in Zimbabwe (Source: IMR database). IMR database).

Most of these estimates are based on operating minesMost of these estimates are based on operating mines

Mineral Reserve estimates (tons)

Year of estimate

Gold 84m 1990s

Asbestos 560m 1993

Nickel 114m 1980

Coal 2 billion 1992

Copper 350m 1988

Chrome 608m 2001

Iron ore 1 billion 1973

Cobalt 8,000 1987

Platinum 136m 1988

Aluminium 2m 1983

Exploration for coal bed methane gas has recently been Exploration for coal bed methane gas has recently been carried out and there are huge estimates of reserves carried out and there are huge estimates of reserves being given going to billions of cubic metres of gas. But being given going to billions of cubic metres of gas. But detailed exploration to prove these reserves are yet to be detailed exploration to prove these reserves are yet to be done.done.

The mining industry in Zimbabwe has generally The mining industry in Zimbabwe has generally remained a primary producer and exporter. We have remained a primary producer and exporter. We have exported to the region, the continent and internationally exported to the region, the continent and internationally (Source: Ministry of Mines). (Source: Ministry of Mines).

Contribution of mining to the economy (CSO, etc Contribution of mining to the economy (CSO, etc (?).):(?).):

4.5% of Gross Domestic Product (GDP) in the 4.5% of Gross Domestic Product (GDP) in the 1990s, 1990s,

4.5% of employment in the same period, 4.5% of employment in the same period,

10.2% of Gross National Investment from 1992 10.2% of Gross National Investment from 1992 to 1997, and, currently, aboutto 1997, and, currently, about

40-45% of foreign exchange earnings. 40-45% of foreign exchange earnings.

FISCAL REGIME

The schedule of royalties are as follows (Mining in Zimbabwe, 2002/2003, p.9.):

• Precious stones10%, • precious metals 3%, • base metals 2%, • industrial minerals 2%, • coal bed methane gas 2% and coal 1%.

Capital goods imported for purposes of mining are exempt from import restrictions in the first five years of development and all capital expenditure is tax deductible at 100%.

Right to market directly subject to reporting requirements (to report to Minerals Marketing Corporation).

Mining Investment in ZimbabweMining Investment in Zimbabwe[1]

From 1968 to 2009 the ratio of investment to gross-From 1968 to 2009 the ratio of investment to gross-output was estimated at between 10 and 12 percent. output was estimated at between 10 and 12 percent.

Vigorous mining industry expansion was recorded for Vigorous mining industry expansion was recorded for 1968-1971 period, the period during which nickel and 1968-1971 period, the period during which nickel and ferrochrome experienced expansion. During this period ferrochrome experienced expansion. During this period investment averaged 21.5% of gross output. investment averaged 21.5% of gross output.

Another period of vigorous expansion was the mid Another period of vigorous expansion was the mid 1990s. 1990s.

From 1973-1996 mining investment averaged 25 percent From 1973-1996 mining investment averaged 25 percent of output (at current prices). of output (at current prices).

Since the late 1990s there was steep decline in mining Since the late 1990s there was steep decline in mining investment (besides 1995 and 1996). investment (besides 1995 and 1996).

[1] Based on Hawkins (2009) Based on Hawkins (2009)

During the period 1983-1993 there was negative net investment and a During the period 1983-1993 there was negative net investment and a backlog in replacement investment. backlog in replacement investment.

After 1997, except in the platinum and diamond sectors, exploration After 1997, except in the platinum and diamond sectors, exploration and new capacity investments have been minimal. According to the and new capacity investments have been minimal. According to the President of the Chamber of Mines at the Chamber of Mines Annual President of the Chamber of Mines at the Chamber of Mines Annual Congress in 2007, since 2003 no new (major) exploration licences had Congress in 2007, since 2003 no new (major) exploration licences had been issued despite that applications for new EPOs had been made. been issued despite that applications for new EPOs had been made.

A lot of the equipment being used has also aged or become obsolete. A lot of the equipment being used has also aged or become obsolete.

The post-crisis recovery of the mining industry requires more than The post-crisis recovery of the mining industry requires more than normal investment levels in both exploration and capacity, since the normal investment levels in both exploration and capacity, since the industry had effectively retrogressed to an ‘immature’ status. Recovery industry had effectively retrogressed to an ‘immature’ status. Recovery requires large foreign injections .i.e. foreign direct investment (FDI), requires large foreign injections .i.e. foreign direct investment (FDI), the achievement of which will depend on the new mining sector policy the achievement of which will depend on the new mining sector policy and private sector response to it. and private sector response to it.

DISCUSSION ON DISCUSSION ON DETERMINANTS OF MINING DETERMINANTS OF MINING INVESTMENT IN ZIMBABWEINVESTMENT IN ZIMBABWE

Cash flow problems and Credit constraints [Cash flow problems and Credit constraints [Based on Chamber Based on Chamber of Mines, 2010]of Mines, 2010]

Cash flow problems for the mining sector have been caused Cash flow problems for the mining sector have been caused

by a number of factors, which include:by a number of factors, which include:

Stiff surrender requirementsStiff surrender requirements – for the gold sector mines were – for the gold sector mines were required to surrender 100% of their proceeds since 1997 (up to required to surrender 100% of their proceeds since 1997 (up to 2009 at the advent of dollarization) by being forced to sell their 2009 at the advent of dollarization) by being forced to sell their produce to the Reserve Bank of Zimbabwe in return for Z$ at the produce to the Reserve Bank of Zimbabwe in return for Z$ at the rate of Z$55/US$1. rate of Z$55/US$1.

The RBZ also owed mining companies substantial amounts The RBZ also owed mining companies substantial amounts of money in foreign currency. This debt emanated either from of money in foreign currency. This debt emanated either from the raids the Bank did on mines private accounts to fund the raids the Bank did on mines private accounts to fund critical areas of need during the crisis, or unpaid mineral critical areas of need during the crisis, or unpaid mineral deliveries. Later the RBZ converted this debt into gold bonds deliveries. Later the RBZ converted this debt into gold bonds which could not be redeemed unless they were steeply which could not be redeemed unless they were steeply discounted.discounted.

With respect to credit, this was and is simply not available With respect to credit, this was and is simply not available due to low savings in the domestic market. For example, in due to low savings in the domestic market. For example, in December 2009, total deposits amounted to US$1.3 billion, December 2009, total deposits amounted to US$1.3 billion, an insignificant figure considering the country’s requirements. an insignificant figure considering the country’s requirements.

With such restrained cash flows and credit it was very difficult With such restrained cash flows and credit it was very difficult for mines to meet operational requirements let alone to for mines to meet operational requirements let alone to achieve net investments. achieve net investments.

Interest ratesInterest rates

There have not been any significant lines of credit to the mining There have not been any significant lines of credit to the mining sector for fixed capital investment from the local credit market. sector for fixed capital investment from the local credit market.

Studies have also concluded that a negative relationship between Studies have also concluded that a negative relationship between investment and interest cannot be supported in Zimbabwe investment and interest cannot be supported in Zimbabwe (Mlambo, 2010; Dzawanda, 1994), while others which have (Mlambo, 2010; Dzawanda, 1994), while others which have obtained results consistent with the theory have found them to be obtained results consistent with the theory have found them to be insignificant (Dailami & Walton, 1989). This is also true of mining insignificant (Dailami & Walton, 1989). This is also true of mining investment. investment.

However, the local banking sector is sometimes an important However, the local banking sector is sometimes an important source of working capital. In this case, interest rate becomes an source of working capital. In this case, interest rate becomes an important factor that affects the operation of mines hence affects important factor that affects the operation of mines hence affects the general business outlook. Interest rates (on borrowing) are the general business outlook. Interest rates (on borrowing) are more than 30% per annum currently (with dollarization) (Chamber more than 30% per annum currently (with dollarization) (Chamber of Mines, 2010). of Mines, 2010).

Country risk profile and uncertaintyCountry risk profile and uncertainty

Political risk is the single most significant damaging factor on mining Political risk is the single most significant damaging factor on mining investment.investment.

There is great uncertainty with respect to property rights. This is There is great uncertainty with respect to property rights. This is due to (Based on Chamber of Mines 2010): due to (Based on Chamber of Mines 2010):

• The fear of expropriation which is real among miners. This is The fear of expropriation which is real among miners. This is especially due to the recent land reform programme that especially due to the recent land reform programme that dispossessed many white farmers of their land for redistribution dispossessed many white farmers of their land for redistribution to the majority of Zimbabweans. Some of these farmers have not to the majority of Zimbabweans. Some of these farmers have not been compensated and are not sure of ever being been compensated and are not sure of ever being compensated. compensated.

• There are also concerns of the rule of law emanating from cases There are also concerns of the rule of law emanating from cases whereby court orders have been disregarded.whereby court orders have been disregarded.

• There have been long disputes in the courts over farmland (and There have been long disputes in the courts over farmland (and some of these disputes have gone to the regional SADC court), some of these disputes have gone to the regional SADC court), and these are yet to be resolved.and these are yet to be resolved.

The Mines and Mineral Act is in the process of being amended. The Mines and Mineral Act is in the process of being amended. Originally, the amendment sought to transfer 51% of the stake in Originally, the amendment sought to transfer 51% of the stake in the mining sector to the indigenous people (meaning basically the mining sector to the indigenous people (meaning basically black Zimbabweans), 26% of which was not to be paid for black Zimbabweans), 26% of which was not to be paid for immediately. The bill, in its original form, faced stiff resistance immediately. The bill, in its original form, faced stiff resistance from the mining industry, and was withdrawn for further review. from the mining industry, and was withdrawn for further review. This bill has taken too long to be finalized, and during this time, This bill has taken too long to be finalized, and during this time, many big investors have been sitting on the fence. many big investors have been sitting on the fence.

There is also the Indigenization and Empowerment Bill which There is also the Indigenization and Empowerment Bill which has been on the cards for quite some time. This looks at all the has been on the cards for quite some time. This looks at all the sectors of the economy. sectors of the economy.

Risk profile is also compounded by large foreign debt arrears, Risk profile is also compounded by large foreign debt arrears, which have meant that Zimbabwe could not access critical which have meant that Zimbabwe could not access critical support from international creditors like IMF and the World Bank support from international creditors like IMF and the World Bank (Chamber of Mines, 2010).(Chamber of Mines, 2010).

Project internal rate of return and adverse operational environment (Based on Project internal rate of return and adverse operational environment (Based on Chamber of Mines, 1989, 2010; Roussos, 1988; Mining in Zimbabwe Chamber of Mines, 1989, 2010; Roussos, 1988; Mining in Zimbabwe 2002/2003; and Hawkins, 2009)2002/2003; and Hawkins, 2009)

The business environment has also been affected by the following:The business environment has also been affected by the following:

Lack of foreign currency especially for non-exporting mines. Companies had Lack of foreign currency especially for non-exporting mines. Companies had to apply for forex at the RBZ and most of the times would not get it, and to apply for forex at the RBZ and most of the times would not get it, and would end up in the black market. Forex allocation to the mining sector (in the would end up in the black market. Forex allocation to the mining sector (in the 1980s) was so minimal that it only covered minimal maintenance (Chamber of 1980s) was so minimal that it only covered minimal maintenance (Chamber of Mines Journal, 1989). It could only be expected to have worsened after that. Mines Journal, 1989). It could only be expected to have worsened after that.

Rising cost of imported spares due to the parallel market exchange rates.Rising cost of imported spares due to the parallel market exchange rates.

General inflationary environment which has caused an escalation of operating General inflationary environment which has caused an escalation of operating costs including rises in wage bill. costs including rises in wage bill.

Inadequate rail service due to old National Inadequate rail service due to old National Railways of Zimbabwe equipment. Railways of Zimbabwe equipment.

Rising electricity tariffs and frequent power Rising electricity tariffs and frequent power outages. Power outages have been so outages. Power outages have been so significant that mines had to buy generators.significant that mines had to buy generators.

Skills flight - Skills flight - mining skills are scarce mining skills are scarce worldwide and Zimbabwe has lost geologists, worldwide and Zimbabwe has lost geologists, engineers, technicians and managers to the engineers, technicians and managers to the world labour market during the recent crisis.world labour market during the recent crisis.

ESTIMATED RESULTS FROM A ESTIMATED RESULTS FROM A FLEXIBLE ACCELERATOR FLEXIBLE ACCELERATOR MODEL FOR ZIMBABWEMODEL FOR ZIMBABWE

This study estimates the flexible accelerator This study estimates the flexible accelerator model using the data for Zimbabwe Mining sector model using the data for Zimbabwe Mining sector from 1977 to 1997. from 1977 to 1997.

The data were obtained from Reserve Bank of The data were obtained from Reserve Bank of Zimbabwe (1998) and CSO(2001).Zimbabwe (1998) and CSO(2001).

tgttt

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The model estimated is both an The model estimated is both an autoregressive model and a distributed lag autoregressive model and a distributed lag model. To take care of autoregressiveness model. To take care of autoregressiveness we use the instrumental variable technique, we use the instrumental variable technique, and the and the ad hoc methodad hoc method is used to deal with is used to deal with the problem of distributed lags. the problem of distributed lags.

Model without lagged output variableModel without lagged output variable

Model with lagged output variableModel with lagged output variable

The second model is unstable and produces meaningless The second model is unstable and produces meaningless results we use the first model.results we use the first model.

63.63),207.0()183.2()327.1(

18),6128.0()1559.0(8624.98

88.0,1271.03403.0131

18,2

21

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df

RIQI gtt

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22.110),893.4()107.5()631.2()385.5(

17),1267.1()5065.0()1953.0(8419.114

95.0,5133.55866.25138.0618

17,3

211

Ft

df

RIQQI gttt

gt

ResultsResults

Autonomous investment Autonomous investment

The results show that autonomous investment is negative at –Z$131 The results show that autonomous investment is negative at –Z$131 million. This coefficient is, however, insignificant at 0.05. This means million. This coefficient is, however, insignificant at 0.05. This means that autonomous investment is statistically equal to zero. This that autonomous investment is statistically equal to zero. This indicates that when there is no production in the current period and indicates that when there is no production in the current period and has been no investment the previous year, there will be zero has been no investment the previous year, there will be zero investment this year. investment this year.

However, considering the negative sign, this result means that when However, considering the negative sign, this result means that when mines are not producing and have not invested in the previous year, mines are not producing and have not invested in the previous year, there will be disinvestment in the current year. This indicates a move there will be disinvestment in the current year. This indicates a move towards liquidation. For some mines in Zimbabwe we have had towards liquidation. For some mines in Zimbabwe we have had consecutive years of non-production and non-investment and many consecutive years of non-production and non-investment and many have actually degraded beyond care-and-maintenance to liquidation have actually degraded beyond care-and-maintenance to liquidation or just closing down, suffering natural depreciation of capital.or just closing down, suffering natural depreciation of capital.

Current outputCurrent output

The results show that investment in the current period The results show that investment in the current period is positively affected by current output. The positive is positively affected by current output. The positive coefficient is significant at 0.05. The sign of the coefficient is significant at 0.05. The sign of the coefficient of current output is consistent with coefficient of current output is consistent with theoretical expectations, that is, an increase in current theoretical expectations, that is, an increase in current output would cause an increase in investment. output would cause an increase in investment.

Lagged dependent variable Lagged dependent variable

The coefficient of the lagged dependent is negative The coefficient of the lagged dependent is negative and insignificant at 0.05. The following possibilities and insignificant at 0.05. The following possibilities may be drawn from the negative sign:may be drawn from the negative sign:

This result may indicate that capital expansion is very discrete This result may indicate that capital expansion is very discrete – which may reflect the attitude of miners to try to take – which may reflect the attitude of miners to try to take advantage of short-term or once-off investment incentives, for advantage of short-term or once-off investment incentives, for example, investment credits. Once they are no longer there example, investment credits. Once they are no longer there the investment drive stops or falls.the investment drive stops or falls.

The result also seems to reflect the small-scale nature of The result also seems to reflect the small-scale nature of mining in Zimbabwe, which, therefore, may shorten lead-time mining in Zimbabwe, which, therefore, may shorten lead-time to one year for a project. The mining industry in Zimbabwe is to one year for a project. The mining industry in Zimbabwe is characteristically small-scale (especially the gold sector, which characteristically small-scale (especially the gold sector, which is the main contributor to mining output value), and the view of is the main contributor to mining output value), and the view of most mines is short-term. Few miners are prepared to most mines is short-term. Few miners are prepared to undertake new projects or expansion projects that take more undertake new projects or expansion projects that take more than one year of waiting before they come into operation. So than one year of waiting before they come into operation. So when investment is undertaken this year, it may mean no when investment is undertaken this year, it may mean no investment for some years to come in the particular project or investment for some years to come in the particular project or by that particular miner.by that particular miner.

Whole model Whole model The explanatory power of the model as a whole is high at 88%.The explanatory power of the model as a whole is high at 88%.

Conclusion and policy recommendations based on the model and the Conclusion and policy recommendations based on the model and the foregoing discussionforegoing discussion

It has been shown that the most significant factor that drives investment is It has been shown that the most significant factor that drives investment is current output. current output.

A negative relationship between A negative relationship between successive investmentsuccessive investment levels is also shown to levels is also shown to exist, and it has been shown that possible factors to explain this include the exist, and it has been shown that possible factors to explain this include the discrete or once-off nature of investment, and the small-scale nature of mines discrete or once-off nature of investment, and the small-scale nature of mines in Zimbabwe. in Zimbabwe.

The influence of The influence of interest rateinterest rate is insignificant in Zimbabwe because of the non- is insignificant in Zimbabwe because of the non-existence of local credit. However, interest rate has affected the cost of existence of local credit. However, interest rate has affected the cost of working capital hence general business outlook.working capital hence general business outlook.

Cash flowCash flow problems have also limited internal sources of funds for investment. problems have also limited internal sources of funds for investment. These cash flow problems are linked to the Reserve BankThese cash flow problems are linked to the Reserve Bank

Political risk and uncertainty have significantly held back big investment, and Political risk and uncertainty have significantly held back big investment, and created a series of short-term/small investments. Risk is related to created a series of short-term/small investments. Risk is related to MinesMines Act, Act, EmpowermentEmpowerment Bill, and the recent Bill, and the recent land reformland reform programme. programme.

Rates of returnRates of return have also been affected by various operational constraints and have also been affected by various operational constraints and problems including lack of problems including lack of forexforex, , parallel marketsparallel markets for forex, general domestic for forex, general domestic inflationinflation, dilapidation of , dilapidation of transport infrastructuretransport infrastructure, rise in , rise in energyenergy costs and loss costs and loss of of skillsskills to other countries. to other countries.

Some of the policy recommendations:Some of the policy recommendations:

Need to reduce risks and uncertainties in the mining sector. Need to reduce risks and uncertainties in the mining sector. • This can be done through provision of market information, including the This can be done through provision of market information, including the

development of a comprehensive database on mining, mineral development of a comprehensive database on mining, mineral processing, geology, mineral economics and general economic processing, geology, mineral economics and general economic environment in Zimbabwe (indicative planning). environment in Zimbabwe (indicative planning).

• Finalization of laws on mining and empowerment.Finalization of laws on mining and empowerment.• Enhance respect of private property rights among citizens.Enhance respect of private property rights among citizens.• Improve rule of law (especially the implementation of court orders)Improve rule of law (especially the implementation of court orders)

Need to espouse macroeconomic policies that further stabilize the economy Need to espouse macroeconomic policies that further stabilize the economy (stabilization policies)(stabilization policies)[1]. .

Need to relook at the fiscal regime that impacts upon the mining sector in Need to relook at the fiscal regime that impacts upon the mining sector in order to have a long-term rather than a short-term view (make long term order to have a long-term rather than a short-term view (make long term investment incentives). investment incentives).

Need for Government to prioritise mining in the allocation of forex. Need for Government to prioritise mining in the allocation of forex.

Need for Government to directly promote current production through Need for Government to directly promote current production through enhancing mining sector services such as geosurveys, analytical services enhancing mining sector services such as geosurveys, analytical services (for export or exploration) and so on.(for export or exploration) and so on.

[1] On indicative planning and stabilization policy refer to Driver & Moreton On indicative planning and stabilization policy refer to Driver & Moreton (1992, p.157-158).(1992, p.157-158).

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ACKNOWLEDGEMENTSACKNOWLEDGEMENTSThe author wishes to acknowledge God The author wishes to acknowledge God Almighty for suggesting this topic and for taking Almighty for suggesting this topic and for taking me through the writing of it.me through the writing of it.

BIOGRAPHYBIOGRAPHYLyman Mlambo is a mineral economist at the Lyman Mlambo is a mineral economist at the Institute of Mining Research, University of Institute of Mining Research, University of Zimbabwe, and can be conducted at: Institute Zimbabwe, and can be conducted at: Institute of Mining Research, University of Zimbabwe, of Mining Research, University of Zimbabwe, P.O.Box MP167, Mount Pleasant, Harare, P.O.Box MP167, Mount Pleasant, Harare, Zimbabwe. Email: Zimbabwe. Email: lymlambo@science.uz.ac.zw. lymlambo@science.uz.ac.zw.

THANK YOU!THANK YOU!