The government of Zimbabwe is exploring the consolidation of limestone deposits under either the Industrial Development Corporation of Zimbabwe (IDCZ) or the Ministry of Mines and Mining Development, as outlined in the new Zimbabwe Industrial Reconstruction and Growth Plan (ZIRGP). This short-term policy framework aims to attract significant investment into domestic clinker production, a critical element for cement manufacturing, in a bid to revive the manufacturing sector and reduce reliance on costly clinker imports.
The ZIRGP suggests that consolidating limestone resources could open up new investment avenues, enhancing clinker production capacity, and thereby reducing cement production costs. Cement producers in Zimbabwe currently import a substantial portion of their clinker, a factor driving higher production costs and limiting competitiveness. By increasing domestic clinker production, the proposed measures could reduce import dependency and make cement more affordable for consumers.
The consolidation plan is anticipated to stabilise the raw material supply chain, providing cement manufacturers with a steady source of limestone, ensuring they can meet growing demand without production interruptions. The Zimbabwean cement industry currently has an installed capacity of 2.6Mta, but local production only accounts for 1.65Mt, with imports surpassing US$59m in 2023. National demand is estimated at 1.8Mt, underscoring the potential for expansion.
Challenges, including high electricity tariffs, outdated equipment, and raw material shortages, have resulted in Zimbabwean cement prices being 80-120 per cent higher than regional averages. Public pressure has increased to allow more affordable imports. To address these issues, the policy document recommends increasing the cement import licence fee from US$100 to US$500 per 30t to curb imports, alongside reducing the electricity tariff for the cement industry from US$0.16/kWh to US$0.10/kWh. This ring-fenced tariff adjustment could lower cement prices by five to seven per cent, making locally produced cement more competitive.
