• Tue. Apr 23rd, 2024

Gold shines in August

ByEconomic Times

Sep 10, 2022

By ETimes

Gold deliveries to Fidelity Printers and Refinery (FPR) in the eight months to August 2022 grew by nearly 41 percent to 22,3 tonnes sustaining an upward trajectory in the year in comparison to 13,16 tonnes delivered in the same period in 2021.
 
The country is targeting a revised target of 35 tonnes in deliveries this year and with just four months to go before the year closes, deliveries would need to average about 3,18 tonnes a month till then. This, however, seems likely as monthly purchases have averaged 2,8 tonnes for the year.
 
Small scale miners produced above two tonnes as they delivered 2,3 tonnes, an increase of 13,4 percent from July and 18,28 percent year on year. Cumulatively in 2022 they have delivered 14,7 tonnes against 8,7 tonnes last year and are close to the three tonnes per month target.
 
Deliveries from primary producers improved to 1,1 tonnes from 0,965 tonnes in July and one tonne in the same month last year.
 
The buoyancy in the gold sector performance has lately been spurred by favorable commodity pricing structure on the global scale since last year.
 
The yellow metal is anticipated to play a key role in supporting the government’s 2022 growth target of 9,5 percent in the mining sector.
 
Finance and Economic Development Minister, Professor Mthuli Ncube in his 2022 mid-term review and supplementary budget indicated that the government had reserved US$10 million for the establishment of gold centres in each province.
 
This is to enhance small-scale miners’ performance with an ultimate objective to deliver three tonnes of gold per month.
 
On the other hand, the Reserve Bank of Zimbabwe (RBZ) noted it is facilitating a loan facility to capacitate existing and new gold mining ventures so as to increase production.
 
It has since promised to retain the obtaining favorable incentive regime and lobby for policies that promote investments in the gold mining sector.
 
Zimbabwe’s total foreign currency receipts are anticipated to reach US$7, 3 billion by year-end spurred by increases in mineral receipts benefiting from the mineral commodity price boom, as well as increases in agriculture and manufactured exports.
 
Chamber of Mines Zimbabwe(CoMZ) president Isaac Kwesu indicated that growth in output in the period under review stemmed from a number of factors including proliferation of new projects particularly at Eureka, Rio Zim, Blanket Mine and How mine.
 
“These mines have been contributing significantly,” said Mr Kwesu.
 
Also he noted that mines whose production costs traditionally surpassed returns had since resumed production in face of rising gold prices.
 
He further indicated that the attractive gold prices were encouraging gold deliveries through formal channels.
 
“Suboptimal mines have resumed operations in face of firming gold prices and have significantly added to the gold output, the firming of gold prices have also seen a rise in deliveries through formal channels by small-scale miners,” he said.
 
Primary producers however indicated that they remain inhibited by the inadequate power supply and dearth of recapitalisation funding and unfavorable earnings retention policy.
 
Access and allocation of capital remain the biggest issue facing primary producers.
 
According to primary producers, rising exploration and production costs have been detrimental to profit margins and leaving investors doubtful about engaging in new projects, mainly emerging companies.
 
Zimbabwe Miners Federation (ZMF) chief executive Wellington Takavarasha attributed the growth in gold output to fruitful engagements between players in the sector and government departments.
 
He said cooperation with big mining operations like Freda Rebecca through tributing of small scale mining operations, had led to improvement in gold production.
 
“Improvement in gold output has been driven mainly by growing linkages between ZMF and the government, this has significantly enhanced the ease of doing business with regards to small scale miners operations.
 
“On the other hand gold prices are going up, it is at its all-time high which is favorable to the sector,” said Mr Takavarasha.
 
There has been a hive of activity in the gold sector since last year and the sector is now seeing these initiatives bearing fruits, with more than 10 major gold producers undertaking various improvements or initiatives from infrastructure to production.
 
Essentially, Caledonia launched its central shaft (project) this year and is expecting its production to hit 80 000 ounces this year, which is a first-time record, Freda is ramping up their production, Shamva gold mine has reopened and many other initiatives have resulted in a significant upturn.
 
Major players in the sector have also moved to discourage the smuggling of the yellow metal – Harare

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