22% rise in Zim gold pro­duc­tion

The Star Late Edition - - COMPANIES - Tawanda Karombo

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.

Roy­al­ties

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.

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