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Gold, Platinum Glitter for Zim

ZIMBABWE’S platinum producers continue to lead the pack in output while gold is expected to pick towards the last quarter of the year, a chamber of mines report said.

Chamber of Mines president Victor Gapare said platinum mines were operating at near full capacity despite lower international prices as compared to last year.
He said: “Mines in the platinum sub-sector are operating near full capacity. The mines are ramping up production from new capacity. However prices at around US$1 200/oz are still much lower than the peak of US$2 300 seen in 2008.”
Gold mines which were forced to stop operations last year owing to unstable macro-economic environment in the country are expected to lift year-end output to around 4 000 kg.
“Gold production is picking up considerably and as at July 24, total gold production for the year to date was 1 400kg compared to 2 623kg achieved during the same period last year. My own estimates are that by the end of the year, it’s feasible to have produced at least 4 000kg,” Gapare’s report titled state of the mining sector said.
Metallon Gold Zimbabwe, the country’s largest gold producer has started producing while Freda Rebecca is expected to commence operations soon. Gold prices remain very attractive above US$940 an ounce.
Metallon at its peak accounted for 60% of Zimbabwe gold output.
Hwange is still operating at around 30% of capacity.
The company is said to be refurbishing the dragline at the colliery which should be completed by end of August.
Current demand for coal is about 350 000 tonnes a month and HCC expects to be able to meet this demand by Q4 this year.
“What will be critical for HCC is the ability of the major customer Zesa to pay for the coal as it is not sustainable for HCC to sell below production cost,” the report said.
Base metals and nickel mines are said to be still on care and maintenance but BNC is remodelling its operations with a view to start production. World prices are still well below the peaks achieved in 2008.
In ferrochrome, Zimasco is already operating at 60% capacity and will go up to 80% by the end of August 2009.
Prices have gone up to USC89 from USC69/lb but this is still well below the USC205 achieved during the third quarter of last year.
The chamber believes that miners should spend aggressively on exploration going forward.
By 1993, the World Bank had identified Zimbabwe as one of the countries in Sub-Saharan Africa that needed to spend at least US$20m per year over a five-year period on new exploration but a myriad of economic problems saw mines failing to meet key working capital requirements.
For the record the country’s gold annual output potential, given an environment conducive to accelerated investment and exploration, is estimated in excess of 50 tonnes.
Output which rose to 27 tonnes in 1999 as Zimbabwe became the third largest producer on the continent has been declining, reaching a record low of 3,5 tonnes last year.
As of June 30 2009, gold mining companies were owed about US$30 million for gold delivered in 2008, by the Reserve Bank.
During the first quarter of 2009, there were no gold deliveries that took place as most mining companies remained closed owing to viability challenges in 2008. Deliveries in April and May stood at 700kg.
To date, gold dealership licences have been issued to Blanket Mine, Forbes and Thompson, DTZ-OZEGIO of Russia, the Zimbabwe Gold Miners and Millers Association, the Chamber of Mines and Ashanti Gold Fields.
Zimbabwe’s largest gold mine, Metallon Gold, has re-opened two of its mines, How and Shamva after getting a loan of US$15 million from Afreximbank (US$10 million) and local financiers (US$5 million) for working capital and refurbishment of plant and equipment. The other three remaining mines will resume production by the end of the year.  
Zimbabwe is targeting to raise gold output to 650 000 ounces annually in the next five years depending on power availability.
Platinum production has been steadily on the increase from 500 kg in 2001 to above 5 000 kg in 2007.


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