HomeBusiness DigestMinerals value tumbles by 17%

Minerals value tumbles by 17%

ZIMBABWE’S mineral production value tumbled 17,8% to US$930,9 million in the first half of 2013 compared to US$1,133 billion in the previous comparative period owing to softening international prices and an unstable operating environment.

Taurai Mangudhla

Latest Chamber of Mines of Zimbabwe (CoMZ) statistics for the period to June 2013 show the country’s aggregated mineral value shed US$202 million after underperformance of the gold and platinum sector.

According to CoMZ figures, gold production for the period slid 21,7% to 6 727,36kg compared to 8 593,3kg in the first half of 2012. In value terms, gold production fetched US$325,8 million compared to US$448,9 million prior year.

Zimbabwe has been struggling to go back to its 1999 peak annual gold production of 27 tonnes with President Robert Mugabe last year announcing steps were underway to decriminalise activities of illegal panners, who are mostly active in the gold sector.

The move allows the players, now recognised as artisans, to operate in a legal and properly managed manner as the country seeks to boost mineral production.

Furthermore, government has been pushing for recapitalisation of its gold buying unit, Fidelity Printers, to encourage local deliveries and plug mineral leakages to neighbouring South Africa.

Platinum production for the six months was almost flat in terms of value at US$291 million in the first six months of 2013 compared to US$285 million last year while volumes stood at 6 599,49 kg and 6 469,50 kg in the first six months of 2012 and 2013 respectively.

The country’s platinum production is expected to increase in the current year after the largest producer Zimplats commissions its phase two expansion project, adding 90 000 ounces of platinum to the company’s annual production and increase national output to 430 000 platinum ounces annually.

The gross national production from the three major platinum producers –– Zimplats, Unki Mine and Mimosa –– falls short of the 500 000 ounces per year which the industry says is required to support the setting up of a smelter.

Zimplats in June said at least US$1 billion was needed to grow platinum output to 500 000ounces.

Chrome production stood at 92 073tons (t) worth US$10,8 million in the period under review as the sector battles a raw chrome export ban, while coal production volumes were 955 086t worth US$39 million in the period under review.

Nickel and copper volumes for the six months amounted to 4 887,33t and 4 036, 06t respectively.

In May this year, the chamber’s immediate past president Winston Chitando told the mining body’s annual general meeting the extractive industry might not meet the 17% growth target projected by government due to softer international commodity prices and local systemic factors such as inadequate energy and suboptimal cost structures.

The mining sector was forecasted to grow 17,1% this year from the 10,1% achieved last year, according to the Chamber. Gold output was projected to reach 17 000kg from 14 742kg last year, while platinum output was expected grow to 12 500kg from 10 525kg, CoMZ said.

Chitando said despite ongoing investment in the mining sector, as well as the resuscitation of nickel and asbestos mining, the sector has been dogged by a cocktail of charges which include royalties, corporate income tax, value added tax, capital gains tax, local authority charges, environmental charges, licence and registration fees, among others.

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