• 18.9 tonnes delivered as of September compared to 19 tonnes in entire 2020
  • Mines Ministry targeting 100 tonnes annually by 2023
  • Looming rain season and exchange rate fluctuations will hamper production and sales in last quarter
  • Makes it highly impossible to reach 27 tonnes recorded in 2019

HARARE – Gold deliveries to Fidelity Printers and Refineries (FPR) climbed to the highest monthly outturn of 3.1 tonnes in September 2021 to reach 18.9 tonnes year to date, which in essence is now at the same level compared to 2020 total deliveries of 19 tonnes.

Breaching the prior year’s underwhelming performance is encouraging for the gold sector that has been under pressure due to a confluence of factors among them ineffective payment modalities and the threat of side marketing.

These challenges saw annual gold production tumble from 33.2 tonnes achieved in 2018 to 27 tonnes in 2019, which was lower than a target of 40 tonnes set by the government.

Gold deliveries subsequently declined further to 19,052 tonnes in 2020.

The Reserve Bank of Zimbabwe took a commendable approach earlier this year by introducing an incentive scheme to boost deliveries to FPR.

The move was followed by a significant increase in output, especially from the small-scale miners who have emerged as the country’s leading gold producers in recent years.

Speaking the 2021 Zimbabwe Mining Indaba held in June 2021 in the resort town of Victoria Falls, Mines and Mining Development Minister, Winston Chitando gave an ambitious target that the country will increase gold production to 100 tonnes annually by the year 2023.

Looking Ahead

The impending rain season which usually starts in October across most of the country’s regions will likely hamper mining activities and small-scale miners who are the leading producers of gold in Zimbabwe are more vulnerable to harsh weather patterns.

In addition, the high exchange rate volatility makes the local currency component of gold deliveries payments less attractive and this may push producers to seek better value on alternative markets (side marketing).

Considering the above, I believe that the country will not be able to reach pre-pandemic levels of 27 tonnes (2019) this year. The significance of harsh weather conditions and exchange rate fluctuations on mining operations makes it highly unlikely that the country will be able to reach the 3.1 tonnes feet achieved in September in any of the remaining three months.

Looking further ahead, it is almost impossible to imagine how the country will boost annual gold production from the current levels to 100 tonnes next year and beyond.

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