Gold production tumbles

GOLD output plunged to seven tonnes in the first five months of 2021 from 9,2 tonnes during the same period last year, figures from Fidelity Printers and Refiners (FPR) show.

Large-scale producers produced four tonnes, with the small-scale miners contributing three tonnes.

In May alone, deliveries of gold were 1,66 tonnes down from two tonnes registered in the same period the prior year.

Gold deliveries in January were 997,62kg, went up in February to 1,17 tonnes and firmed to 1,8 tonnes in March before decreasing to 1,3 tonnes the following month.

Gold is one of the key minerals expected to drive government’s ambitious plan of a US$12 billion mining industry by 2023.

Gold production, alongside platinum group of metals, hydrocarbons like oil and gas, coal, gold, lithium, chrome and ferrochrome, are expected to be the major contributors.

The gold sector, drawing from both small and large-scale producers, targets to produce 100 tonnes of gold from the current levels of about 20 tonnes.

Mines and Mining Development minister Winston Chitando recently told delegates at the Chamber of Mines conference that the target of producing 100 tonnes of gold was achievable, but producers need improved access to alternative sources of financing such as loans.

“There are three specific issues that have come out here (conference) and we will pick them up in our normal interface,”he said.

“There is a need to ensure that we surpass 100 tonnes target and utilisation of gold loans through the intervention of coming up with structures where gold producers will be allowed to have structures in which they access gold loans. There is need for us as Chamber of Mines and government to come up with a menu of alternative finance options.”

But leakages remain a huge cause for concern.

Economist Victor Bhoroma told NewsDay Business that massive gold outflows were militating against gold output growth.

“There are still massive leakages in the production and marketing of gold, which are costing Treasury and the economy at large. The formal marketing of gold can play a key role in oiling the local foreign exchange market among other direct benefits,” Bhoroma said.

In May, a Zimbabwean man, Tashinga Nyasha Masinire (33), was arrested at the OR Tambo International Airport in Johannesburg, South Africa, while attempting to smuggle gold worth over US$780 000.

His arrest exposed the laxity of security at ports of entry and airports as he managed to evade security checks at Robert Gabriel Mugabe International Airport.

Last October, Zimbabwe Miners Federation president Henrietta Rushwaya was nabbed at Robert Gabriel Mugabe International Airport under similar circumstances after being found in possession of 6kg of gold worth US$366 000.

Zimbabwe Miners Federation is a grouping of small-scale miners.

Home Affairs minister Kazembe Kazembe last September admitted that Zimbabwe was losing at least US$100 million worth of gold every month to smuggling.

“We are losing close to US$100 million worth of gold every month which is being smuggled out of the country through our borders. Criminality has become complex and sophisticated given that perpetrators are harnessing technological advancement to enhance their criminal activities,” Kazembe said then.

Last year, gold exports earned the country US$994,7 million, slightly below US$1,058 billion recorded in 2019.

The lower decline in value terms was due to higher gold prices realised in 2020 compared to 2019.

Gold deliveries to FPR in 2020 were 19,05 tonnes as compared to 27,66 tonnes during the same period in 2019, representing a year-to-year decline of 31%.

Last year, small-scale miners contributed 9 313 tonnes against 9 738 tonnes produced by large-scale miners.

In 2019, gold output by large-scale miners was depressed at 10,18 tonnes, with small-scale miners producing a huge chunk of 17,47 tonnes.

The Reserve Bank of Zimbabwe early this week allowed large-scale gold miners, who deliver the yellow metal above the monthly average quantities, to retain 80% of their forex earnings and directly export a portion of their bullion as it gradually eases control of gold trading in the country.-newsday.co.zw