Gold output drops in the first quarter of 2021

ZIMBABWE’s mining sector has experienced a mixed performance in the first four months of 2021 with minerals like gold, chrome and nickel suffered some declines while platinum, diamonds and coal performed better, Treasury has revealed.

During the period under review, the mining sector suffered major draw backs from a number of factors such as unstable power supply, heavy rains which culminated in the flooding of shafts, working capital challenges and subdued demand for some minerals.

According to the treasury department, gold output during the first quarter stood at 4,311 kg compared to 6,152 kg produced in the same period in 2020, and 4,794 kg in the last quarter.

“The decline was mainly on account of a fall in production from artisanal and small-scale gold sector. Large scale producers delivered about 2,291 kg during the first quarter of 2021, 11.2% higher than what was produced during the same period in 2020, while artisanal and small-scale gold sector delivered 1,586 kg, about 55.6% below the production of the same period in 2020, reflecting leakages through smuggling,” reads the first quarter bulletin.

Speaking to BusinessMail, Chief executive officer of the Young Miners Federation Payne Kupfuwa said too much rains stifled production levels because most shafts were filled with water yet dewatering equipment costs are unbearable.

“The mining season started a bit late this year as the rainy season took longer than expected so it affected the overall gold production output which as well can affect the US$12 billion mining target but we are still hopeful to attain it,” he said.

Similarly to gold, nickel and chrome output also declined during the period under review. Nickel output at 3,284 tonnes in the first quarter of 2021, was 16.6% and 22.1% below output produced in the comparable period in 2020 and in the previous quarter (Q4 2020), respectively while chrome production receded to 300,926 tonnes from 353,669 tonnes for the same period in 2020 and 311,495 tonnes in the fourth quarter of 2020.

“Reduced nickel output reflects low throughput from both primary and secondary producers. Output from the primary producers was 25% lower than the first quarter production in 2020 while 44% lower than what was realised in the preceding quarter,” said treasury.

However, during the first quarter production of minerals like platinum slightly surpassed production for the previous quarter by 1.3%, diamond production increased by 15% and coal production stood at 596,753 tons during compared to 462,140 tons produced during the same period in 2020.

The treasury first quarter bulletin has attributed firm international prices and resuscitation of closed mines to this improved the performance in the mining sector.

Zimbabwe’s mining sector is chasing a government target of growing the mining economy to US$12 billion by 2023 up from US$2.7 billion attained in 2017, with gold sector expected to fuel the ambitious mining sector growth.

“As we work towards the attainment of vision 2023, government must ease the requirements for foreign and local investors who want to invest in gold mining to boost efficiency gains,” Kupfuwa said.

Kupfuwa believes that continual encouragement of the formalisation of mining operations will boost production and curb smuggling and leakages outside the country.

“Authorities should be in a position to be guarantors of productive Young Miners to access short, medium and long term loans and alternative financing models to boost efficiency gains or production,” he said.

 

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