Minerals value slumps 8pc

HARARE - The total value of minerals Zimbabwe produced in the four months to April 2014 — excluding diamonds — declined by 8,5 percent to $596,4 million from $652 million in same period last year.

According to latest Chamber of Mines of Zimbabwe (CoMZ) statistics, gold remained the major cash cow, contributing $225,95 million.

The Chamber, however, said the yellow metal’s production decreased by eight percent to 5,5 tonnes compared to six tonnes produced in prior comparable period.

This comes as high production costs, limited long-term capital and depressed global metal prices are threatening viability of the mining industry.

Platinum production fell to 4,000 kg from 4,272 kg while the value of the white metal mined in the four months was $163,4 million, down from $196,1 million.

Palladium output was flat at 3 200 kg. Its value marginally increased from $66,2 million to $67,6 million. At least 5 400 tonnes of nickel valued at $56,5 million were produced, up from 3,300 tonnes.

Coal output increased to 2,1 million tonnes valued at $32,3 million from 1,3 million tonnes produced in the four months to April 2013.

According to AfrAsia’s weekly market report gold remains the mainstay of mineral production in the country and the government is targeting it to become one of the top five gold producing countries in Africa.

“Although some large gold miners are planning for expansion programmes which will boost production, such as Freda Rebecca’s plans to raise annual gold output from 60 000 ounces to 100 000 ounces in the next two years, the target remain a huge task,” said AfrAsia.

This comes as the country has intensified efforts to mobilise gold in excess of 15 tonnes this year as the country forges ahead with its plans to be readmitted to the London Bullion Market Association (LBMA).

The country’s gold output has been steadily increasing since 2010 and rose to 14 742 kg in 2012 from 12 992 kg a year earlier.

Early this year, Charity Dhliwayo, the then acting Reserve Bank of Zimbabwe (RBZ) governor said government’s decision to re-designate Fidelity Printers and Refiners Limited (Fidelity) as the sole buyer and exporter of gold in the country, would facilitate the mobilisation of the yellow metal.

“As such, Fidelity Printers and Refiners will, apply for accreditation to the London Bullion Marketers Association once they refine gold in excess of 10 tonnes per annum. Notably, the framework would pave way for the country to directly export refined gold to the international market, build gold reserve buffers as well as resuscitate the domestic jewellery industry,” she said.

Industry experts claim that re-admission to the London market, the biggest centre for gold trading according to the LBMA, would increase Zimbabwe’s ability to sell to global buyers.

The southern African country dropped out of the organisation in 2008 after production slumped as a result of electricity and chemical shortages and delayed payments from the central bank, which bought all the metal produced locally.

Since its suspension from the LBMA, Zimbabwe has been exporting its gold through South Africa for refining.

However, in the 2014 National Budget government announced that from this year onwards, Fidelity would be the sole buyer of gold for value addition.

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