Gold output reach record levels as large scale miners stumble on foreign currency shortages


    Harare – Gold deliveries to Fidelity Printers and Refiners (FPR) for 2018 reached a record 33,2 tonnes, a 34 percent increase on the previous year surpassing the initial 30 tonnes target, but falling short of the revised target of 34 tonnes set by government.

    Lately, small-scale miners have become the largest gold producer after large-scale miners succumbed to the harsh economic environment notably since 2016. Small-scale miners contributed 21,7 tonnes while primary producers accounted for the remaining 11,5 tonnes.

    The trend shows that deliveries from small-scale miners consistently went up month on month between February and June of last year before a marginal softening in July. By the end of October, gold deliveries had already surpassed the initial 30 tonnes target, recorded at a marginal 30,2 tonnes.

    Large-scale miners maintained a stable performance throughout the previous year, thus relatively lowering its contribution.

    Historically, primary miners dominated production and deliveries but the harsh economic environment characterised by foreign currency shortages resulted in small-scale miners overtaking primary miners in terms of gold deliveries to FPR.

    The acute shortages of foreign currency is unsurprisingly reflected in the low contribution of large-scale miners compared to that of small scale-miners, a discrepancy which requires government to address so as to improve the viability of the gold industry as it seek to achieve the vision of producing 100 tonnes per year in the next five years.

    The shortage of foreign currency is affecting large scale miners both in the cost of production as well as attainment and maintenance of machinery suitable for large scale mining. Some large-scale miners for example Rio Zimbabwe had to suspend their operation due to shortage of foreign currency.

    Large-scale miners have also been accused by the government through the Ministry of Mines and Mining Development of under declaring their gold output with some primary producers believed to be selling their gold to FPR through small scale miners.

    “We have noted with concern that there are some large-scale operators who have been under declaring their production, and instead, they have been selling their production through the small-scale miners,” Deputy Minister of Mines and Mining Development, Mr Polite Kambamura is on record saying.

    The immense contribution of small-scale miners can be attributed to efforts by the government to formalise that sector so as to minimise leakages through the informal market by encouraging cooperation from the related stakeholders.

    Zimbabwe has only about seven operating large-scale miners and they remain stationed at their shafts whereas small scale miners are largely mobile and swamp all geographical locations with gold prospects, some of which are not economically viable for large scale miners to exploit because it will be costly on their part.

    Equity Axis News


    Please enter your comment!
    Please enter your name here