Zimbabwe’s impressive gold production trajectory has vanished into thin air if the latest official figures from the country’s sole buyer Fidelity Printers are anything to go by.
Zimbabwe’s gold production has nosedived, if the latest official figures from the country’s sole buyer, Fidelity Printers, are anything to go by.
Having breached last year’s gold production levels of 28 tons and this year’s target of 30 tons, the Zimbabwe authorities projected year-end gold output to reach an unprecedented output of 34 tons.
However, chances appear slim that this target will be achieved, after gold deliveries to the country’s sole buyer, Fidelity Printers, slumped 30.79% in November.
The biggest surprise was reserved for small-scale miners, whose monthly production averaged 2 tons since the beginning of the year, but saw output for November drop by nearly 50% to just 602kgs.
For the first time this year, small-scale miners produced less than big mine houses.
Market watchers said given the foreign currency challenges being faced by the Zimbabwean authorities, miners are finding it lucrative to divert sales to illegal buyers and smugglers.
The Reserve Bank of Zimbabwe, through Fidelity Printers, pays small scale miners 70% in US dollars and 30% in the local bond notes, a currency many resist using.
Big miners, who recently threatened to close shop, have now had their allocation upped to 55% from 30%, but are still asking for more, leaving authorities in a foreign currency bind.
Market watcher Mukasiri Sibanda said while it’s still early to come up with a substantive conclusion, there are several factors that could have affected deliveries and production.
“Miners have been facing supply shocks. As you are aware, they use diesel for most of their equipment, and that has been in short supply,” he said.
He also suggested some custom millers may have closed for failure to comply with government regulations, which could feed into the quantity of production. The industry was being watched closely by government, he said.