ZIMBABWE’S gold deliveries declined by 8,04% between December 2012 and January 2013 due to annual shutdowns at most mines, the African Development Bank (AfDB) has reported.
Report by Taurai Mangudhla
In its February 2013 issue of Zimbabwe’s Economic Review, AfDB said the annual shutdowns saw month-on-month production declining from 1 052kg in December 2012 to 967,45kg in January 2013.
The figures were obtained from the Reserve Bank of Zimbabwe’s gold buying unit, Fidelity Printers and Refiners (Fidelity).
However, comparing gold deliveries for January 2012 with those of January 2013, total deliveries fell by 8,14% to 967,45kg year-on-year.
“This was a result of the significant decline in deliveries by small-scale gold producers; these deliveries declined by 33,7%, from 216,47kg in January 2012 to 143,40kg in January 2013,” said the regional bank.
“On the other hand, deliveries by primary producers declined by 1,51%, from 836,69kg in January 2012 to 824,05kg in January 2013.”
Deliveries from small-scale producers continue on a downward trend as government fails to recapitalise Fidelity, the major end-buyer of gold from small-scale miners.
Mines minister Obert Mpofu has repeatedly emphasised the need for adequate capital to make instant payment for gold at Fidelity and plug mineral leakages, mostly to neighbouring South Africa where the metal fetches higher prices.
However, compared to total gold deliveries in 2011, there was an increase of 15,72% in total gold deliveries for the year 2012. This increase can be attributed to firming prices on the international commodity market where prices averaged US$1 669 per ounce.
Gold and platinum prices had an upward trend for the greater part of January 2013. The gold price rose from US$1 640/oz as at January 4 to US$1 689/oz by mid-January before closing the month at US$1 665/oz.
The Indian government’s decision to raise its import taxes on gold, reducing demand in the process, was the main driver of the decline in the gold price at the end of January.
Last month, AfDB reported that total month-on-month gold deliveries declined by 5,23% to 1 052kg for the month of December 2012 compared to 1 110kg in November 2012.
Year-on-year, gold deliveries declined by 19,82% from 1 312kg in December 2011 to December 2012, mostly as a result of production stoppages due to equipment breakdown and power outages.
Total cumulative gold deliveries for the year 2012 stood at 13,47 tonnes, falling short of the targeted 15 tonnes for 2012 by 10,17%.
Zimbabwe’s economy, whose real GDP is projected to marginally improve to 5% in 2013, is underpinned by improvements in mining and agriculture.