- Large-scale gold miners experience a 21.6% decline in contributions in January 2025
- Small-scale miners seize the opportunity, increasing gold contributions by 70.2% in January 2025
- Gold finished January on an all-time-high of US$2,812, up 8% on the month
global gold prices, and returns. source, World Gold Council, Equity Axis
Harare- Gold deliveries in January 2025 saw a significant uptick, rising by 29.2% to 3.1 tonnes compared to 2.4 tonnes in the same period last year, according to the latest data from Fidelity. However, this increase was driven primarily by small-scale miners, who capitalised on gold prices surpassing US$1,800 per ounce.
Meanwhile, large-scale miners faced challenges, with output declining due to high operational costs, and key projects undergoing maintenance.
Large-scale miners experienced a significant decline in gold deliveries in January 2025, with 868.7 kilograms delivered, down from 1,108 kilograms in January 2024. This represents a substantial 21.6% year-over-year decrease, highlighting a notable slowdown in gold production.
The decline was attributed to several factors, including increased production costs, and the temporary shutdown of key projects for maintenance.
Some mines are in the process of being rejuvenated to extend their operational lifespans, further reducing immediate output. These challenges highlight the vulnerabilities faced by large-scale operations in maintaining consistent production levels failing to take advantage of high gold prices.
In contrast, small-scale miners seized the opportunity presented by low rainfall in January 2025, ramping up production to deliver 2,265 kilograms of gold, a substantial 70.2% increase from the 1,333 kilograms recorded in January 2024.
The surge in output from small-scale miners was fueled by record-high gold prices, which surpassed $1,800 per ounce, providing a strong incentive for increased production.
Small-scale miners, who are often paid in cash and operate with lower overhead costs, were able to quickly adapt to the favourable market conditions.
Their agility and ability to respond to price fluctuations allowed them to take full advantage of the rising gold prices, contributing significantly to the overall increase in deliveries.
The disparity between large-scale and small-scale mining output reflects the differing dynamics within the gold sector.
The cash-based nature of small-scale mining operations also provides them with greater flexibility, enabling them to ramp up production when market conditions are favorable.
Looking ahead, the gold market is expected to remain robust, with prices supported by ongoing geopolitical tensions, economic uncertainty, and strong demand from both investors and central banks.
However, the challenges faced by large-scale miners, including weather-related disruptions and rising costs, may continue to constrain their output in the short term. Efforts to rejuvenate aging mines and improve operational efficiency will be critical for large-scale producers to regain their footing and contribute more significantly to overall gold deliveries.
Since 2017, small-scale miners have remained a key driver of gold production contributing over 60% last year to the national output. Government is targeting 40 tonnes of gold this year.
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