Online Reporter
Business Reporter
GOVERNMENT’S sustained efforts to reopen closed mines and create conditions for existing operations to expand, as well as supportive measures to artisanal and small-scale miners, pushed gold output to a record 36,4 tonnes last year.
Major investments were made into the sector, resulting in the reopening of some closed mines and a substantial increase in production at others.
Incentivising artisanal and small-scale miners, who contribute the bulk of deliveries, proved to be a masterstroke, as the initiative also partly formalised their operations by encouraging them to sell gold through official channels.
The record output not only exceeded the Government’s target of 35 tonnes but also surpassed the previous all-time high of 35,3 tonnes reached in 2022.
This puts Zimbabwe on course to become one of Africa’s major gold producers.
From 2017 to date, the sector has experienced remarkable growth, despite some challenges along the way.
From a low of 21,1 tonnes in 2016, production rose to 24,8 tonnes in 2017.
Output subsequently jumped by 34 percent to 33,2 tonnes in 2018.
However, production took a dip in 2019 as deliveries slumped by 16,8 percent to 27,6 tonnes owing to the reintroduction of the Zimbabwe dollar, which largely made miners cautious.
This persisted in 2020 as small-scale miners did not agree with payment modalities set by the country’s sole gold buyer, Fidelity Gold Refinery (FGR), leading to another marked drop in gold deliveries to 19 tonnes.
Miners felt that rising operational costs, delays in payments from FGR and a Government decision to pay only 75 percent of deliveries in US dollars was adversely affecting output and deliveries.
Government responded by ensuring that small-scale producers receive 100 percent payment in foreign currency.
Since 2021, production has been steadily rising, consistently surpassing the 30-tonne mark.
For instance, output in 2022 rose to 35,3 tonnes, laying a foundation for the new record set in 2024.
The Government has been introducing measures designed to enhance gold production, particularly focusing on empowering the small-scale mining sector.
Seventeen gold-buying centres have since been established countrywide, up from 12 over the last five years, contributing significantly towards achieving national production targets.
Furthermore, initiatives such as the Gold Development Initiatives Fund (GDIF) by FGR and mobile buying units have been deployed to streamline the gold delivery process.
The expansion and effectiveness of the gold sector have not only revitalised the mining industry but also had a substantial positive impact on the economy, particularly in terms of boosting Zimbabwe’s export earnings.
“This is because of medium- to long-term strategy where, since 2018, the Zimbabwe open for business mantra entailed growing investment in the mining sector, including exploration and commencement of brownfield projects.
“So, the brownfield projects are now starting to kick in terms of production, either new production or improvement, so we are going to see an incremental production of not only gold, but of all minerals every year,” Mines and Mining Development Minister Winston Chitando said.
Gold is Zimbabwe’s single largest export by value, followed closely by platinum.
The two minerals account for over half of the nation’s export revenue.
The Government expects sustained growth in gold deliveries, with production projected to reach 40 tonnes this year.
“There is also new production coming from greenfields, which will translate to incremental production every year. As such, we are targeting a minimum of 40 tonnes as we will be looking at interventions that support small-scale industrial miners in terms of equipment,” added Minister Chitando.
FGR general manager Mr Peter Magaramombe expressed optimism regarding the sector during challenging global economic circumstances.
“This performance is a testament to the sector’s potential and efforts of our stakeholders and attributed to increased mining activities by our artisanal and small-scale miners, prompt payments for our miners and favourable gold prices,” said Mr Magaramombe.
The incentives offered to gold producers, he said, had also helped boost production and deliveries.
“We are saying to our artisanal and small-scale miners, when you bring 10kg of gold or more in the coming month, we will pay you 5 percent gold incentives,” he said.
The incentives have been critical in curbing leakages through smuggling and under-reporting.
The mining sector is expected to play a pivotal role in Zimbabwe’s quest to become an upper middle-income economy by 2030, as outlined in the National Development Strategy 1. To achieve this, the Government is actively working to boost local gold production by rehabilitating closed mines, identifying new areas for exploration and empowering small-scale miners.
Recently, the Ministry of Mines and Mining Development unveiled a US$5 million facility under the Mining Industry Loan Fund aimed at supporting artisanal and small-scale miners, further underscoring the commitment to strengthen Zimbabwe’s gold mining sector.
