- YTD Gold Deliveries: 24,089 kg
- Q3 Gold Output: 10,309 kg, up 33% from Q2 and 20% from Q3 2023
- September Deliveries & Target: 3,414 kg (1,009 kg from large-scale, 2,405 kg from small-scale)
- Still short of revised annual target
Harare- Gold deliveries from January to September 2024 have increased to 24,089 kilograms, surpassing the 22,760 kilograms delivered during the same period in 2023.
For the third quarter of 2024, gold deliveries rose significantly to 10,309 kilograms, representing a 33% increase from the 7,739 kilograms delivered in the second quarter.
This also marks a 20% increase compared to the third quarter of 2023, which saw deliveries of 8,590 kilograms.
Breaking down the September 2024 deliveries, large-scale miners contributed 1,009 kilograms, slightly lower than the 1,027 kilograms delivered in August and 961 kilograms in September 2023.
Small-scale miners, on the other hand, delivered 2,405 kilograms in September, up from 2,373 kilograms in August and 2,170 kilograms in September 2023.
Small-scale miners account for over 60% of the total gold deliveries, while large-scale miners contribute around 30%.
However, despite this growth, gold production remains below the government's initial target of 40 tonnes, which has since been revised downward to 35 tonnes.
Reaching Zimbabwe's revised gold target of 35 tonnes by December appears highly improbable. Delivering the required additional 11 tonnes in just three months seems daunting, considering the country's gold sector has delivered only 24,089 tonnes in the first nine months.
This translates to a monthly average of approximately 2.67 tonnes, which would need to increase by 37% to 3.67 tonnes per month to meet the target.
Historical delivery rates and industry constraints cast doubt on achieving this goal. The impending rainy season, typically spanning October to December, will likely hinder mining activities, further reducing output.
Existing challenges such as power cuts, high electricity costs, taxes, and maintenance issues continue to plague the sector.
While it's mathematically possible to reach 35 tonnes, the probability is low. Unforeseen improvements in mining efficiency, significant investments, or government interventions addressing industry constraints could increase this probability.
Favourable weather conditions which is unlikely due to La Nina could also contribute. However, based on current trends and challenges, the likelihood of falling short remains high, around 80-85%.
Achieving 35 tonnes by December would require small-scale miners to deliver around 7.7 tonnes (70% of 11 tonnes) and large-scale miners to contribute approximately 3.3 tonnes (30% of 11 tonnes) in the last quarter. Given the enormity of this task, it seems improbable that Zimbabwe's gold sector can meet this ambitious target.
Ultimately, the actual probability may vary depending on various factors. Nonetheless, the odds are stacked against reaching the revised target, highlighting the need for realistic assessments and strategic planning to support Zimbabwe's gold sector growth.
The industry has faced numerous challenges, including frequent electricity blackouts, high electricity costs, taxes, 25% export surrender retentions and maintenance issues.
Major gold producers have adjusted their production forecasts accordingly.
Caledonia has placed Bilboes under maintenance, revising its FY24 guidance from 80,000 ounces to a lower range of 74,000 ounces.
Kuvimba is also revamping its gold mines, while RioZim struggles with power cuts and high taxes, impacting its bid for a 78 MW solar plant.
To address gold leakages, the government introduced the "mine-to-market" gold traceability initiative effective on 30 September 2024.
According to Peter Magaramombe, the General Manager of Fidelity Printers and Refiners, the system will enable real-time monitoring of the gold supply chain. It will track the gold bullion weighing by producers and its subsequent delivery to Fidelity Printers and Refiners, which can then also be traced to the final market.
However, the success of this program hinges on its independence from government interference and influential individuals.
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