22% rise in Zim gold production
GOLD production is on the increase in Zimbabwe and the Zimbabwe Revenue Authority (Zimra) said mineral royalties had firmed up as a major bullion producer in the country and output had risen by as much as 22 percent in the first quarter. This was despite operating woes such as cash and payment constraints. Zimbabwe is struggling for foreign currency to offset constraining liquidity challenges in the country. Mining and tobacco production, however, have provided some respite for the cash-strapped economy.
Willia Bonyongwe, chairperson of the state revenue authority, said mining royalties for the quarter period to the end of March firmed to $16 million (R210.8m). Zimbabwe has projected a growth in gold production this year to about 24 tons, up from last year’s output of around 19 tons. Mining executives in Zimbabwe say the government should support the industry through speedily processing payments to international suppliers.
There has been a backlog of payments from Zimbabwe and this has delayed loan repayments, dividend payments and supplies of key raw materials, as well as machinery.
“The mining industry is a major foreign currency earner for the country, but we are constrained in terms of payments that enable us to generate more money. More government assistance is needed in this regard,” said a Chamber of Mines official. The firm mineral royalty contribution propped up Zimbabwe’s total revenue collections for the first quarter period by 10 percent to $862m. The revenue collections for the period are also about 6 percent above targeted levels.
There has been “low consumption of excisable products such as beer and tobacco due to the low disposable income and liquidity crisis in the absence of a credible alternative payment system”, said Bonyongwe.
The higher mineral royalty payments compare well with Caledonia Mining Corporation’s 18 percent rise in gold production for the first month to around 12 794 ounces year-on-year.
The company, which operates the flagship Blanket gold mine, has a target of about 60 000 ounces for the 2017 year as it continues to explore a deeper ore body at the mine. Other gold miners in Zimbabwe include Metallon Corporation, Asa Resources and the platinum groups that produce gold as a by-product.
“Production continues to be supported by access to resources below the 750m level through the development of a second decline into the AR main ore body,” said Steve Curtis, the chief executive of the Toronto-listed miner.
Apart from gold, platinum miners that include Impala Platinum and Anglo Platinum, as well as Sibanye Gold, have also been doing well in Zimbabwe.