Power outages, smuggling affect gold production

By Albert Nxumalo

The small-scale mining sector continues to shoulder the burden of producing and delivering more gold to Fidelity Printers and Refiners (FPR) as compared to established miners who are lagging behind despite having modern machinery.

Despite an overall 17 percent drop in deliveries to Fidelity, the sole legal buyer of gold of the yellow metal, small scale miners` significant role in Zimbabwe’s gold sub-sector was again proven in 2019 when they collectively delivered17,478.74kgs.

Established mining houses only managed 10,181.51kgs.

Figures availed by Reserve Bank of Zimbabwe governor Dr John Mangudya during his Monetary Policy Statement (MPS) on Monday show that in 2019, only 27.66 tonnes of gold was produced representing a production drop of 17% from 33.29 tonnes recorded during the same period in 2018.

“Gold deliveries to Fidelity Printers and Refiners (FPR) for the period January to 31 December 2019 were 27.66 tonnes, a decline of 17% from 33.29 tonnes recorded during the same period in 2018. The national gold target for 2019 was 35 tonnes”.

Added Mangudya, “The decline is attributable to electricity challenges coupled with inadequate equipment for small scale miners to access deep gold reefs and gold leakages through smuggling.”

The country has been experiencing massive load shedding that lasts up to 18 hours a day, which the Zimbabwe Electricity Supply Authority (ZESA) attributed to the critically low water levels at the main hydro plant station in Lake Kariba and ageing equipment at Hwange Power Station.

Players in the mining sector have for years lamented lack of systems to monitor actual production of minerals, adding that there was a high level of side marketing happening at Fidelity and Zimbabwe Mining Development Corporation (ZMDC).

In December last year, President Emmerson Mnangagwa revealed that the country lost gold worth US$60 million through a syndicate of businessmen that clandestinely export the precious mineral to Dubai.

“On the issue of side marketing, I am not a mukorokoza (gold panner), but I was in Dubai last month and a company there said they got US$60 million gold from Zimbabwe through the black market and they even told me that the money does not come into government coffers,” he said then.

To improve production, the central bank boss said strategies will “include enhanced capacitation of gold producers and formalisation of artisanal miners, coupled with rigorous monitoring of gold production and marketing”.

However, artisanal miners are routinely raided and arrested by police.

Based on the figures, highest production of 1,964.14 kg by small scale miners was recorded in September and lowest of 687.39 kg in June.

Primary producers had a high of 1,006.64 kg in April and lowest of 639.85 kg in February.

Despite a significant drop in gold production, RBZ governor said he was optimistic that the economy will grow at 3 percent on account of increased international prices of key minerals produced in Zimbabwe such as gold, platinum and palladium.

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