Gold target on horizon as deliveries top 22 tonnes

Business Reporter

Gold deliveries to Fidelity Gold Refinery in the eight months to August 2022 grew by nearly 41 percent to 22,3 tonnes from 13,2 tonnes in the same period a year ago, raising expectations the revised year-end target of 35 tonnes will be reached.

With four months remaining, deliveries would have to average 3,2 tonnes.

This year, deliveries have, however, averaged 2,8 tonnes.

Small-scale miners contributed 14,7 tonnes against 8,7 tonnes last year, and are edging closer to the three tonnes per month target.

Performance in the gold sector has been spurred by favourable commodity prices since last year.

The yellow metal is anticipated to play a key role in supporting Government’s push to grow the mining sector by 9,5 percent this year.

In the recent Mid-Term Budget and Economic Review, Finance and Economic Development Minister Professor Mthuli Ncube indicated that the Government had set aside US$10 million for the establishment of gold centres in each province.

This is to enhance small-scale miners’ performance and help deliver three tonnes of gold per month.

On the other hand, the Reserve Bank of Zimbabwe (RBZ) announced it is facilitating a loan facility to capacitate existing and new gold mining ventures.

It has since promised to retain the obtaining favourable incentive regime and lobby for policies that promote investments in gold mining.

Chamber of Mines Zimbabwe (CoMZ) president Mr Isaac Kwesu said rising gold output in the period under review was driven by new projects, particularly at Eureka, RioZim, Blanket Mine and How Mine.

“These mines have been contributing significantly,” said Mr Kwesu.

Rising prices on the international market, he added, had also made gold mining viable.

“Sub-optimal mines have resumed operations in the face of firming gold prices and have significantly added to gold output. The firming of gold prices has also seen a rise in deliveries through formal channels by small-scale miners,” he said.

Primary producers, however, indicated that they remain encumbered by inadequate power supply and lack of funding for recapitalisation, among other factors.

According to primary producers, rising exploration and production costs have been detrimental to profit margins and affecting investments into new projects.

Zimbabwe Miners Federation (ZMF) chief executive officer Mr Wellington Takavarasha attributed growth in gold output to fruitful engagements between players in the sector and Government.

Co-operation with big mining operations like Freda Rebecca through tributing of small-scale mining operations, he said, had led to rising production.

“Improvement in gold output has been driven mainly by growing linkages between ZMF and the Government.

“This has significantly enhanced the ease of doing business with regards to small-scale miners’ operations.

“On the other hand, gold prices are going up; it (gold) is at its all-time high, which is favourable to the sector,” said Mr Takavarasha.

Over the past year, more than 10 major gold producers have undertaken expansion projects and initiatives.

For example, Caledonia launched its central shaft (project) this year and expects production to hit a record 80 000 ounces.

Freda Rebecca is ramping up production, while Shamva Gold Mine has reopened.