HomeBusiness DigestGovt seeks US$88m for gold sector

Govt seeks US$88m for gold sector

MINES and Mining Development minister Walter Chidhakwa says government is mobilising US$88 million for the acquisition of milling plants and equipment for small-scale miners to boost gold output.

By Fidelity Mhlanga

Zimbabwe’s gold deliveries to Fidelity Printers and Refiners (Fidelity) went up almost 16% to close 2016 at 21,4 tonnes, earning the country US$914 million.

Gold, the country’s number one foreign currency earner, has seen reduced output owing to heavy rains in the first two months of this year.

But Chidhakwa says Zimbabwe should be able to achieve 28 tonnes by year-end.

“We have not done very well in January and February. In January, gold production grew by 7% and in February 2%. I know it’s because of the rains and we will catch up. Again we expect to grow output by 25% to reach our 28 tonnes target at the end of year. What we have lost in the rainy season, we will recover once the season is dry,” Chidhakwa said last week.

He said his ministry was finalising the construction of 26 milling plants, which will be funded through a facility organised by government with some of the equipment, if competitively priced, envisaged to be sourced from South Korea.

“We are still putting together US$88 million, with US$40 million going for the milling plants and US$48 million going for equipment for small-scale miners. It’s a facility that has been mobilised locally. We believe that once we have established these 26 milling plants, they will be spread in the bigger concentration of gold production across the country.

“We are still talking to South Korea. As you are aware, the South Koreans are in a transitional process in terms of their politics and that has slowed our discussions,” he said.

Chidhakwa said the facility will assist to provide small-scale miners with basic equipment such as jack hammers, water pumps, compressors and generators.

Gold is Zimbabwe’s major export, raking in as much as US$10,061 billion between 1980 and 2015, according to central bank figures.

Gold exports amounted to US$2,3 billion between 1980 and 1990 before growing marginally to US$2,5 billion between 1991 and 2000. Between 2001 and 2009, gold exports stood at US$1,9 billion before peaking to US$3,3 billion in the period between 2011 and 2015, mainly on account of increased production.

Gold demand in 2017 is expected to be driven by heightened political and geopolitical risks, currency depreciation, rising inflation expectations, inflated stock market valuations, long-term Asian growth and the opening of new markets, according to the World Gold Council’s 2017 outlook.

“The gold price has been fluctuating since January last year but if you compare with last year, even though the prices came down a little bit low but they are still higher than February last year and we are very happy about it,” Chidhakwa said.

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