HomeLocal NewsMines captains battle to rescue gold sector

Mines captains battle to rescue gold sector

Ministry of Mines bosses are consulting other stakeholders to alleviate the plight of the gold mining sector which has suffered from a massive slump as market prices continue to crash, a senior government official has said.

Kudzai Kuwaza

The price of gold dramatically fell from US$1 800 an ounce to US$1 100 an ounce in the last 18-24 months threatening the viability of gold mines.

Mines deputy minister Fred Moyo told businessdigest in an interview on Wednesday that government is focusing on measures to save the sector from collapse, which includes advocating for lower electricity tariffs.

“The ministry is busy trying to present the case of the gold sector as a collective concern for government and for the nation.” Moyo said. “We want to see if the ministry of Energy and Zesa cannot help us.”

He said apart from reducing the electricity tariffs for gold miners, unions representing mine workers might be forced to accept wage cuts for their members in an effort to maintain viability of the mines.

“It is better to have workers remain on the job being paid less than what they were paid yesterday than having to shutdown the mine and let the workers go home. The unions have to be forward looking,” Moyo said.

Moyo said both he and his boss Mines minister Walter Chidhakwa were “very worried” about the rapid decline of the gold price.

“If gold drops to US$1000 an ounce, we are in trouble. That is the situation we are dealing with and it is very critical that we deal with the situation collectively,” Moyo noted. “We have to work together to find ways of keeping our ship afloat.”

He said that the mines ministry will present the case of gold mines with a view to formalise informal gold miners’ operations, while seeking fiscal relief for the major established gold mines.

The deputy minister said they were various enquiries by investors and, in some cases, due diligence was already being carried out by interested players for various mining projects.

He said there were investments flowing into coal as well as interest in minerals such as iron ore and chrome.

Moyo said that NewZimsteel which was officially opened by President Robert Mugabe in 2011 could soon start operating as they had received information from the ministry of Industry that negotiations between the government and Essar Holdings are progressing well.

On the re-opening of mines which have closed, Moyo said there was need to establish why the mine shut down operations and see which ones could be revived and those which could not due to depletion of mineral reserves.

He said there were cases of mines which could be revived such as NewZim Steel, formerly known as Ziscosteel, and Kamativi Mine. Moyo said there were also some mines which needed exploration to establish how viable it would be to reopen them such as Mhangura and some that had reserves which were depleting such as Shurugwi Mine.

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