Gold production remains depressed

HARARE - Zimbabwe's gold production continued on the downward trend, slumping 11,8 percent to 1 049,30 kg in August 2013 from 1 189,28 kg produced in prior month as depressed international metal prices continue to hamper the industry.

According to figures released by the African Development Bank (AfDB), primary producer deliveries declined by 4,72 percent to 895,13 kg from 934,06 kg.

“Deliveries by small-scale producers declined by 39,60 percent to 154,17 kg in August 2013 from 255,22 kg in July 2013,” the regional institution said.

On a year-on-year basis, total deliveries of the yellow metal went down by 12,55 percent to 1 049,30 kg in August 2013 from 1 199,92 in August last year.

“In the full year to August, primary producers’ deliveries declined by 9,62 percent from 990,36 kg in the previous comparable period to 895,13 kg, while small-scale producers’ deliveries declined by 26,43 percent from 209,56 kg in August 2012 to 154,17 kg in August 2013,” AfDB said.

It noted that the decline in gold deliveries could be attributed to the low international gold prices, which fell to as low as $1,197 per ounce as at 28 June 2013 from $1,670 per ounce in January 2013.

“Gold producers have been incurring higher costs of production leading to viability problems, despite the slow recovery in the gold price in the month of August 2013. The price rose from $1,319 per ounce as at 1 August 2013 to $1,394 as at 30 August 2013,” said the continental financial institution.

Zimbabwe’s gold production has been declining over the years due to operational constraints and poor incentives that have dampened investment into the industry.

At its peak in 1999, the southern African country produced 27 tonnes of gold, but output declined to a record low of 3 000 kg in 2007 as a result of the economic recession and mine closures.

Zimbabwe’s continued decline in gold production saw the country being disqualified from the London Bullion Market Association (LBMA) in 2008.

LBMA accreditation certifies the quality of gold sold by members who must produce a minimum of 10 tonnes per annum to maintain membership.

Wellington Takavarasha, president The Zimbabwe Artisanal and Small Scale Mining Council (Zasmc) recently said gold remittances from small-scale miners have declined from 17 tonnes nine years ago to around two tonnes owing to the arrests of small-scale miners.

In 2006 government launched a programme called ‘Operation Chikorokoza Chapera’ which saw 9 700 illegal gold miners out of the 1,5 million people involved in the informal sector being jailed.

Takavarasha noted that there was need to formalise the operations of the small-scale miners to boost remittances.

“In 2004 they produced 60 percent of the 29 tonnes of gold translating to 17,5 tonnes and in the following year they produced half of what the big mines produced,” he said adding that small scale miners in Zimbabwe remain marginalised yet their contribution is significant to the mainstream economy.

Takavarasha urged government to acknowledge the significant role they played in the country’s economic development.

“We want them to mine sustainably and the only way they can do that is for government to recognise their existence,” he said.

Takavarasha argued that the requirement for small-scale miners to produce Environmental Impact Assessment (EIA) reports before they could be allowed to mine was hampering their operations due to the prohibitive costs of the exercise and the inability by players to comprehend the reports.

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