An analysis of Zimbabwe's comparative advantage in the beneficiation and value addition of minerals

Abstract

Over the past decade, Zimbabwe has implemented various policies in the form of export tariffs and embargoes to stimulate downstream mineral beneficiation. The policies failed to yield tangible results due to, among other factors, inadequate due diligence regarding the capability of the country in terms of its factor endowments to support downstream beneficiation. Additionally, lack of Investment in the country's downstream industries as reflected in its capital stock contributed significantly to poor domestic demand for raw materials. In light of the above, different studies have established that there are few examples where mineral beneficiation oriented policies have yielded positive results in mineral-rich countries. The reasons for failure include lack of comparative advantage and economic viability of the technologies adopted. Related studies have also shown that the similarity of factor intensities and technology across sectors stimulates structural transformation in developing countries. This paper uses the factor endowment approach to evaluate Zimbabwe's comparative advantage in the downstream beneficiation of minerals. The country's arable land, physical capital stock and human capital are used as a measure of its capability to produce beneficiated products along the mineral value chain. By matching Zimbabwe's arable land, capital stock and human capital to the revealed factor intensities for different products, the mineral related products that the country has a comparative advantage in producing are identified and presented.