Zim mineral output slumps

HARARE - Zimbabwe's mineral output remained depressed in February 2014 with gold and nickel registering significant declines, a Finance ministry state of the economy report indicates.

The country produced 831,3kg of gold in February down from 926,8kg in January.

“This (decline) was mainly on account of production slippages from large-scale producers,” said Treasury.

In February, small-scale gold producers increased their output to 190,35kg from 161,91kg produced prior month.

On the other hand, large-scale producers’ output slumped to 740,99kg in February from 764,88kg.

The report added that nickel production fell to 1 557 tonnes from 1 559 tonnes in the period under review.

However, chrome and platinum group metals (PGMs) output improved during the month.

Chrome output increased to 36 794 tonnes in February from 28 207 tonnes in January on the back of increased capacity utilisation, particularly at Chinese-owned Zimasco.

Platinum output went up marginally to 1 044kg from 1 015kg. PGMs such as palladium and rhodium output increased from 809kg and 93kg to 832 kg and 96kg, respectively.

“International market prices for most mineral products remained subdued, due to depressed demand stemming from slackening emerging market growth,” the Finance ministry said.

Meanwhhile, according to the latest Chamber of Mines (CoM) figures,

Zimbabwe’s total gold earnings slumped 20 percent to $626 million in 2013 from $783 million realised prior year.

This comes as escalating production costs, limited access to long-term capital and depressed global metal prices continued to threaten the mining industry’s
viability.

CoM said gold output went down from 14 742,99kg in 2012 to 14 065,22kg in 2013, missing a 15 000kg target 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 has 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.

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.

Government has already escalated pressure to have international mining companies implement the indigenisation policy, which compels foreigners to cede 51 percent shareholding to black locals.

Comments (1)

In my book 190.35 + 740.99 = 931.34, not 831.3, so not a slump at all for gold

John Banda - 8 April 2014

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