Gold deliveries dip: Power woes, funding hurdles hamper miners

ZIMBABWE’S gold deliveries declined marginally by 1,6 percent to six tonnes in the first quarter ended March 31, 2024 compared to the corresponding period last year, official figures show.

According to data from Fidelity Gold Refinery ( FGR), the country’s exclusive buyer of the yellow metal, large scale miners produced the bulk of the metal (3,1 tonnes) while small-scale miners produced 2,9 tonnes.

In the first quarter of 2023, the country produced 6,1 tonnes.

The small-scale miners who traditionally have been the largest contributor to Zimbabwe’s gold production have in the past decried the unwillingness of the banking sector to avail loans to the sector to modernise operations and boost production.

In an interview, a development economist Wendy Mpofu said miners’ operations continue to be hampered by electricity challenges and thus gold output remains depressed. Last year, the country produced a total of 30 tonnes down from 35,3 tonnes in the previous year.

“One of the greatest challenges facing the miners is power supply to ramp up production and this is why we have our delivery figures for the first quarter to March 2024 seemingly constant or showing a marginal decrease if compared to the corresponding period last year,” she said.

Gold Miners Association of Zimbabwe chief executive Mr Irvin Chinyenze has said the gold sub-sector is marred by challenges mostly to do with capitalisation.

“The financial services sector is not amenable to lending to small-scale miners without collateral as a banking requirement. To that end, we have had challenges in accessing financing and more so financing at reasonable lending rates.

“That on its own has serious obstacles towards boosting production and reaching the set targets because we are struggling to capitalise operations,” he is on record as saying.

Last year, stakeholders in the gold sector targeted 40 tonnes of the yellow metal. Other factors that have contributed to a decline in gold production include smuggling and pricing distortions.

Gold is Zimbabwe’s single largest foreign currency earner.

The country was once among the top gold producers on the continent, but has fallen far behind regional peers Ghana, Mali, Burkina Faso, Guinea and Tanzania as an extended economic crisis kept investors away.

Zimbabwe remains largely under-explored with its operating mines struggling to raise capital due to issues over property rights, among others.