Gold earnings slump 20pc

HARARE - Zimbabwe's total gold earnings slumped 20 percent to $626 million last year from $783 million realised in 2012, latest Chamber of Mines (CoM) figures reveal.

This comes as escalating production costs, limited access to long-term capital and depressed global metal prices continue to threaten the mining industry’s viability, though, some major gold producers reported increased output during the period under review on the back of improved exploration investment.

CoM said gold output went down from 14 742, 99 kg in 2012 to 14 065,22 kg last year missing a target of 15 000kg for the year.

The yellow metal’s earnings constituted 32 percent of the $1,98 billion total minerals earnings, which marginally increased by six percent from $1,86 billion achieved in 2012.

Platinum production increased from 10 524 kg to 13,066 kg in the period under review with the white metal’s earnings surging 84 percent to $554 million.

Apart from holding the second largest known platinum reserves in the world after South Africa, Zimbabwe is endowed with vast mineral deposits including gold, iron, nickel, diamonds, copper and coal, among others.

Palladium raked in $206 million from 10 153 kg followed by coal whose total production for the year stood at 4,9 million tonnes, realising earnings of $171 million.

Nickel production went up 56 percent from 7 899 tonnes in 2012 to 14 058 tonnes, earning $158 million.

The increase in nickel’s revenues is largely attributable to improved nickel price on the international market — which at one time fell to $13 500 per tonne last year from $18 000 per tonne in 2012 and has since stabilised to an average of $15 600 per tonne at the present time.

Total raw chrome output was 355 142 tonnes down from 408 475 tonnes in prior comparable period.

Chrome earnings declined from $48,9 million in 2012 to $36,3 million.

Most of the chrome mines are currently under care and maintenance owing to the low prices currently prevailing in the sector and the high operating costs.

According to Finance minister Patrick Chinamasa’s 2014 budget, the mining sector was initially projected to grow by 17,1 percent in 2013, but the target was revised downwards to 6,5 percent, mainly due to low exploration, lack of capital and weakening commodity prices on the international markets.

“In 2014, the mining sector is projected to grow by 11,4 percent, on the back of planned investments and largely driven by strong performance in gold, diamonds, nickel and coal,” he said.

In spite of the relative positive growth trajectory, Zimbabwe remains among 10 least attractive mining investment destinations, ranking 106 of 112 countries, according to the latest Fraser Institute survey.

Among the 10 lowly-rated jurisdictions, the Canada-based think tank included Angola, Côte d’Ivoire and Madagascar.

This comes as over the years Zimbabwe has experienced a pronounced investor flight due to bad economic policies, particularly the indigenisation policy  compelling foreigners to cede majority shareholding to black locals.

Government has already escalated pressure to have international mining companies implement the indigenisation policy thresholds which compels them to cede 51 percent shareholding to locals and this has severely hampered interested foreign investors.

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