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Yoliswa Dube Chronicle Reporter
MINERAL prices have dropped by over 30 percent, a development that requires a review of the fiscal regime and how mining companies conduct their business, the Deputy Minister of Mines and Mining Development, Fred Moyo has said. The deputy minister cautioned mining firms against cutting workers’ salaries due to the drop in the prices, but urged them to review their operations to become more efficient.
Speaking during a question and answer session in Parliament, Cde Moyo said the government needed to give up something in order to allow the business to remain viable. “We all realise that the commodities market at international level has collapsed. Most minerals have realised a price reduction of a minimum of 30 percent,” said Cde Moyo.
He said platinum traded at $1,800 per ounce a few months ago, but was down to about $1,300, while gold which was trading for between $1,700 and $1,800 per ounce went down to $1,100.
“With diamonds, it’s the same story and we’re averaging some $20 per carat and with copper, you can all see our colleagues who are in the gallery, they will understand that copper is also approaching border line prices from a peak of some $7,000 to $8,000 and is going down to around $6,000 or $5,000,” added Cde Moyo
“Commodities have taken a knock and when they take a knock, these dips tend to be cyclic and so they’ll take a few years to climb back to the highs we would’ve experienced. Our mines therefore, have to be a lot more efficient than they would’ve been in the past.”
He said efforts were being made to ensure that all mines operate and remain viable. The deputy minister said if mining firms do not improve on efficiency and lower costs, they would face challenges as all mines sell at the international market for the same price.
“Those who’re efficient in production are the ones that are going to win the markets and are going to realise better margins. You can’t reduce the salary of your workers, but what you can do is ask them to produce more within the same time that they’ve always worked,” he said. “We also need to look at the fiscal regime that’s affecting the mining sector and say, does government give up something in order to allow the business to remain viable. We also have other cost structures that are within the company itself, corporate structures that need to be looked at.”
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