Zimbabwe Gold Production Surges by 25% Amid Economic Challenges

Zimbabwe Gold Production Surges by 25% Amid Economic Challenges

Zimbabwe’s gold output witnessed a significant increase of 25% in January this year, reaching 2,375.3 kilograms. This surge was predominantly driven by small-scale miners, who outperformed their larger counterparts by producing 1,895.9 kg of gold, marking a 32% increase from the previous year. Meanwhile, large-scale miners contributed 1,109 kg, up by 19%.

The Zimbabwe Miners Federation’s acting CEO, Tafirenyika Chitsungo, credits this growth to several government initiatives aimed at enhancing gold production. These include gold mobilisation exercises, the establishment of gold service centers, and the introduction of a responsible mining audit. Efforts to minimize gold market leakages and the liquidity provided by Fidelity Gold Refinery for gold purchases were also significant factors contributing to this achievement.

Despite this positive development, Chitsungo expressed concerns over the declining global gold prices, foreseeing potential impacts on Zimbabwe’s mining sector. With the country’s economy heavily reliant on gold, among other globally demanded commodities, a downturn in global commodity prices could hamper Zimbabwe’s foreign exchange earnings.

The mining sector’s overall growth slowed to 4.8% in 2023, down from 10.5% in the previous year, hampered by challenges such as persistent power outages and rising operating costs due to imported inflation. Although global oil prices dropped by 10% within the year, local diesel prices saw a slight increase, affecting the miners’ cost structure.

Despite these adversities, industry capacity utilization improved, increasing by three percentage points to 84%. However, gold production in 2023 fell by 15% year-on-year to 30.11 tonnes, affected by reduced artisanal mining activity, electricity shortages, and currency fluctuations. Yet, gold prices showed resilience, gaining 14% and closing the year at $2,062 per ounce.

Export forecasts suggest a 6.3% decrease in gold revenues to $1.82 billion. On the other hand, platinum group metals (PGMs) and lithium witnessed varied fortunes, with PGMs prices dropping significantly, whereas lithium production skyrocketed by 761% to 881,709 tonnes, generating impressive export revenues.

Looking ahead to 2024, the industry is poised for a 7.6% growth, buoyed by improved power supplies and continuous investments. Nonetheless, commodity price fluctuations remain a concern, with expectations of reduced revenues and profitability across the sector, despite a stable gold price outlook amidst ongoing economic uncertainties. icon

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