Source: ‘Zim to miss gold target’ – DailyNews Live
DEPUTY BUSINESS EDITOR 28 June 2017
HARARE – The World Bank has forecasted that Zimbabwe will miss its
ambitious 28-tonne gold production for this year, putting a dent on the
country’s economic revival prospects.
This comes as Zimbabwe, which produced 23 tonnes of the yellow metal and
earned over $914 million in export receipts last year, is pinning its
economic hopes on the rebound of mining and agriculture sectors.
In its 2017 Economic Update, the Bretton Woods Institution said gold
production – which accounts for half of the mining sector’s
foreign-exchange earnings – would reach approximately 25,3 tonnes on the
back of buoyant international prices.
“The mining sector is expected to continue growing, but it will remain
vulnerable to macroeconomic conditions.
“Gold production is expected to increase by 10 percent, and global gold
prices are projected to remain broadly stable,” the World Bank said.
Cautioning that the country’s gold miners were going to remain exposed to
the country’s liquidity challenges as they cannot legally hold nostro
accounts, the World Bank said despite government’s move to pay gold miners
in cash, liquidity problems were going to remain a major challenge in the
sector .
“However, gold producers are not legally regarded as exporters and cannot
hold nostro (foreign exchange-denominated) accounts, which leaves them
particularly exposed to liquidity constrains,” the World Bank said.
However, Zimbabwe anticipates to breach the 28-tonne mark as it has been
promoting gold production by the small-scale gold miners who now account
for over 40 percent of the total output since 2015 when government
decriminalised artisanal mining.
To boost gold output, RBZ subsidiary, Fidelity Printers and Refiners, has
also increased the number of registered gold buyers to 344 agents, as the
apex bank moves to help the country achieve its 28-tonne projection.
In the first quarter of 2017 alone, the RBZ allocated over $5 million in
cash for the sole purpose of buying gold as the country’s artisanal gold
miners demand cash for the yellow metal.
Gold continues to be one of the key minerals in Zimbabwe accounting for 47
percent of mineral exports in 2016, up from 40 percent in 2015, employing
in excess of 25 percent of formal employment and over 300 000 involved in
artisanal gold mining.
According to the central bank governor, the expansion in gold output is
underpinned by the increased contribution of the small-scale sector from
an average of 25 percent realised over the past five years to about 40
percent in 2015.
Chamber of Mines Zimbabwe data indicates that primary large-scale gold
producers accounted for 55 percent of gold output in 2016, marginally up
from 55 percent recorded in 2015.
But, contribution of small-scale producers increased from 36 percent in
2015, to 40 percent in 2016, while that for secondary producers declined
to five percent in 2016, from 10 percent in 2015.`
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