HomeBusiness DigestLow prices hit Zim gold sector

Low prices hit Zim gold sector

MINES minister Walter Chidhakwa says Zimbabwe’s gold sector has been affected by low bullion prices on the international market.

Taurai Mangudhla

Appearing before Parliament’s portfolio committee on mines and energy, Chidhakwa said gold output for 2013 was estimated at 17 000kg, but later revised downwards due to depressed prices in the year.

“Gold prices reached to all-time highs of US$1 920,30 an ounce in September 2011 but ended last year at US$1 201. Currently the price is hovering around US$1 290 per ounce,” he said.

“Global gold fell 28% last year, notching up biggest annual decline in 32 years as prospects for global economic recovery prompted investors to switch to riskier assets.”

Chidhakwa said the country’s gold sector is slowly recovering after declining sharply in the last decade from 29,7 tonnes in 1999 when Zimbabwe ranked the third largest producer in Africa and 16th in the world to 3,9 tonnes in 2008 due to macro-economic challenges that affected production.

Gold remains the mainstay of mineral production in the country, accounting for 30% of total value produced in 2013, where production stood at 14,065kg, down 4,49% from 14,742 kg in 2012.

The 2013 total gold value was at US$626, 11 million out of the country’s mineral value in the year to December of US41,96 billion, up 4,2% from US$1,87 billion in 2012.

In the first half of 2014, Chidhakwa said, Zimbabwe produced six tonnes of gold. He said 1,3 tonnes equal to 21,6% of the half year production was from small-scale miners.

Since 2010, about 26% of gold production is estimated to have come from small-scale miners with about 65% of known gold deposits estimated to be in the hands of small scale miners.

Chidhakwa however said the sector’s performance is weighed down by lack of short and long-term financing as small-scale miners cannot access funding, lack proper technologies and sills.

He said government had come up with measures in terms of policy and resource mobilisation to support small-scale mining.

“The recent signing of a US$100 million equipment facility for small-scale miners between the government and XCMG, a Chinese mining equipment supplier, is such initiative we are undertaking,” said the minister, adding disbursement of the loan facility should start this month.

“The money will be available at the end of this month and it will be disbursed by financial institutions. We have a history of a similar facility which we distributed through the organisation and when we looked at how the disbursement was done, only a few individuals benefited (and) my desire is, if we can turn each dollar out of the US$100 million to be used by two or more people to derive more benefits.”

Chidhakwa said going forward, his ministry was crafting gold mobilisation strategies that would see the establishment of gold centers in areas where small-scale gold mining activities were concentrated.

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