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Michael Tome and Tapiwanashe Mangwiro
GOLD deliveries in the first six months of this year grew by 59,28 percent year on year to 15,97 tonnes, putting the country firmly on course to its meeting its target of 35 tonnes for the full year.
Initially, the country had set a target of 40 tonnes, but the figure has since been revised downwards due to prevailing challenges in the primary producers’ sub-sector, which are inhibiting optimal performance.
Deliveries by small scale miners for the six months to June 2022 stood at 10,47 tonnes, accounting for 65, 57 percent of the total deliveries up to June.
On a month on month basis for June 2022 the small-scale miners delivered 1,96 tonnes marginally up from 1,93 tonnes they managed to deliver in the previous month.
Production by large scale primary producers increased by 6,69 percent during the six months under review to 5,5 tonnes despite the myriad of challenges miners claim to be facing, which relate to low foreign currency retention levels.
On a monthly basis, output was 25,63 percent lower in June at 0,83 tonnes compared 1,12 tonnes in the previous month.
“The high (gold) prices are an incentive to produce and we will see increased production this year,” said economist Dr Prosper Chitambara.
He added that Zimbabwe, as major gold producer, will continue to benefit from the improved prices, which will increase foreign currency inflows into the country in a development critical to stabilisation of stability the Zimbabwe dollar exchange rate.
Gold is strategically important to the Zimbabwe economy given that the mineral is the single largest export earner for the country, whose other key exports include platinum group metals and tobacco. In 2021, Zimbabwe received about US$10 billion in forex inflows.
Chamber of Mines of Zimbabwe chief executive said, “The 35 tonne target is very achievable if the current policies are maintained and not tempered with because they have sought increased incentive to produce.”
However, the CoMZ has been engaging the Government on some policies they feel still need to be addressed in order to increase production even further.
“We have written to the Government that the retention ratio should be increased to 80-85 percent in order to see the mines expand and be sustainable,” he added.
The association is also fighting for constant power supply in order to lower the cost of production as well as not disrupt production.
The multiplicity of taxes is also an issue the chamber of mines feels needs to be addressed by consolidating the taxes in order to achieve the ultimate goal of 100 tonnes per year.
Experts say there is a need to look at the capacitation of small scale miners to ramp up production.
“Some small scale miners are reluctant to sell to FPR because they know that the Zimbabwe Revenue Authority (Zimra) will access their information.
“They prefer selling to a parallel market where the tax collector does not have access to their records,” an industry expert who chose anonymity said.
The Reserve Bank of Zimbabwe said they were facilitating a loan facility to be deployed towards capacitating existing and new gold mining ventures so as to increase production.
It has since promised to retain the obtaining favourable incentive regime and lobby for policies that promote investments into the gold mining sector.
The Government has also moved in to assist by providing key equipment for gold centres to drive progress towards the attainment of US$4 billion gold export revenues while it also intends to establish new gold centres following a sudden increase in output.
There has been a hive of activity in the gold sector since last year and the sector is now seeing these initiatives bearing fruits, with more than 10 major gold producers undertaking various improvements or initiatives from infrastructure to production.
Essentially, Caledonia launched its central shaft (project) this year and is expecting its production to hit 80 000 ounces this year, which is a first time record, Freda is ramping up their production, Shamva gold mine has reopened and many other initiatives have resulted in a significant upturn.
Major players in the sector have also moved to discourage smuggling of the yellow metal.
Online Reporter