Zimbabwe gold output drops by nearly 6 tones


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Zimbabwe’s annual gold output fell to 27.6 tonnes in 2019 from an all-time record high of 33.28 tonnes achieved in 2018, statistics from Fidelity Printers and Refiners, the country’s sole buyer of gold, show.

Zimbabwe had targeted to increase gold output to 40 tonnes in 2019.

Output from large mines was 10.181 tonnes, while small scale miners maintained their high production trend, delivering 17.4 tonnes.

Export earnings from gold in 2019, which is Zimbabwe’s largest foreign currency earner, were approximately US$1.3 billion.

The drop in output is a setback for Zimbabwe’s ambitious plans to increase gold production to 100 tonnes annually, with earnings of US$4 billion to anchor the attainment of a vision of a US$12 billion mining industry by 2023.

Most large miners had throughout the year complained of several operational bottlenecks, chiefly the drought-induced power cuts which severely reduced production hours.

In 2019, one of the country’s largest miners, Metallon, kept some of its mines under care and maintenance.

Another, RioZim, was forced to suspend operations at its three gold mines, Renco, Cam & Motor and Dalny, after delays in getting payments for gold deliveries.

The shutdown in February last year was the second one since October 2018 by RioZim for the same reasons.

Foreign currency shortages also resulted in miners failing to pay for essential equipment and consumables on time.

Miners have also argued against Reserve Bank of Zimbabwe regulations which stipulate that gold mining companies sell their metal to the central bank, which only allows companies to retain 55 percent of their export earnings, the rest being paid to them in local currency.

But while other large miners were reeling under the tough operating environment, one miner – Caledonia Mining Corporation – rose above the challenges to deliver a new quarterly record of 16 876 ounces of gold in the last quarter of 2019.

Caledonia, which operates the Blanket Mine in Gwanda, also beat its full year target after producing approximately 55 182 ounces, ahead of planned production of between 50 000 to 53 000 ounces. –New Ziana

Ed: Question is, did gold output fall or was it just a case of less gold being sold to Fidelity the bulk being smuggled out of the country. Economist Eddie Cross said his own estimate was that less than a quarter of the gold being produced in Zimbabwe was sold to the proper channel. Does this mean that Zimbabwe could in fact be producing more than 100 tonnes already?

(26 VIEWS)

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The Insider

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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