Zimbabwe slashes mining growth forecast

Published: 7 hours ago

Zimbabwe has revised its mining sector growth forecast downward for 2025, citing a sharp drop in global prices for key minerals including platinum group metals (PGMs) and lithium, Finance Minister Mthuli Ncube announced in the 2025 Mid-Term Budget and Economic Review.

Initially projected to grow by 5.6%, the mining sector is now expected to expand by just 2.9%, a significant downgrade for a sector that contributes around 12% to the country's Gross Domestic Product (GDP).

"Resultantly, the mining sector is now expected to grow by 2.9% in 2025, downward from the initial projection of 5.6%, mainly on account of reduced output in PGMs and lithium owing to significantly lower international mineral prices compromising mining activities," said Ncube.

The international commodity downturn has particularly affected PGMs, with palladium and rhodium prices falling steeply on the global market. Ncube said major PGM minerals are expected to record significant year-on-year declines.

Platinum production is forecast to fall from 18,910.90 kg in 2024 to 17,539.60 kg in 2025. Palladium is projected to drop from 15,603.22 kg to 14,244.33 kg, while rhodium is also expected to register a notable contraction.

In the first quarter of 2025 alone, output in platinum, palladium, and rhodium fell by 16.2%, 17.5%, and 9.5%, respectively, compared to the same period in 2024.

Zimbabwe's lithium industry, once hailed as a future cornerstone of the economy, has also been hit hard by collapsing global prices and technological shifts in battery production.

"Lithium production is expected to decline to 350,034 metric tons in 2025, primarily on account of depressed international lithium prices," said Ncube.

He attributed the fall to a global oversupply and increasing adoption of alternative battery chemistries, such as lithium iron phosphate (LFP), which require less lithium.

"Technological advancements in battery design are further contributing to reduced demand pressures which in turn affect price," he added.

Lithium output plummeted by 60% in the first quarter of 2025 compared to the same period in 2024.

While PGMs and lithium struggle, gold has emerged as a strong performer, offering a rare bright spot in Zimbabwe's mineral outlook.

"Gold has remained strong globally, with prices persistently rising throughout the first half," Ncube said. "This upward trend has been driven by factors such as central bank stockpiling, investor demand and ongoing economic uncertainties that have reinforced gold's role as a safe-haven asset."

The government is hoping that gold revenues can cushion the blow from the underperformance of other minerals and help stabilize export earnings.

The overall slowdown in mining growth raises concerns over Zimbabwe's fiscal outlook, especially given the sector's critical role in foreign currency generation and employment.

Analysts say the revised projections could negatively impact government revenue targets and complicate efforts to stabilise the economy.

As the global commodities landscape continues to evolve, Zimbabwe's mining sector now faces a strategic imperative: diversify its mineral portfolio, invest in local value addition, and build long-term resilience against external shocks.
- Business Times

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