eBusiness Weekly
Africa Moyo
Zimbabwe is this year is heading towards breaking its 18-year record of the highest ever gold output of 27,1 tonnes, spurred by a sterling performance by small-scale and artisanal miners.
This year’s target is 27 tonnes of gold. A remarkable turnaround in gold production by artisanal miners particularly from June, after a depressed first quarter performance due to heavy rains that throttled production, Fidelity Printers and Refiners (FPR) believes the country will achieve 28 tonnes of gold this year. FPR is the gold buying arm of the Reserve Bank of Zimbabwe (RBZ).
As at October 31, 2017, miners had delivered 19,9 tonnes of gold from artisanal miners and primary producers alone, with more expected from platinum group metals (PGMs).
Platinum miners — Zimplats, Unki and Mimosa – get gold from the refining of platinum.
The gold from PGMs is then exported without being delivered to FPR, and the proceeds are directly sent to the RBZ.
FPR general manager Fradreck Kunaka, told Business Weekly that they expect to take delivery of an average of 2,5 tonnes between November and December to hit the 25 tonnes anticipated from both artisanal miners and primary producers.
Given that artisanal and primary producers upped production in October to 2,8 tonnes from 2,5 tonnes a month earlier, Kunaka believes about five tonnes can be delivered between now and December.
PGMs are expected to chip in with at least three tonnes, pushing the country’s annual haul to 28 tonnes. “Firstly, the 27 tonnes (target) include gold deliveries to FPR and gold in PGMs. At the current levels of deliveries, by year end, around 25 tonnes will have been delivered to FPR and an estimated three tonnes would have been produced in the PGMs.
“This would result in national gold deliveries being around 28 tonnes. “It is our view that based on the current level of deliveries, the 27 tonnes will be surpassed,” said Kunaka.
While Zimbabwe is nowhere near African gold producing giants South Africa and Ghana, the anticipated 28 tonnes output will do a lot to indicate that the country is now back to business in terms of gold mining.
South Africa is the continent’s top producer, hauling 167,1 tonnes last year, a marginal decline from 167,2 tonnes mined in year earlier. The drive towards surpassing the standing 18 year annual gold output, and this year’s target, is largely by the uptake of funds under the Gold Development Fund (GDF).
The GDF, which was provided by the RBZ to capacitate artisanal miners so that they acquire machinery to help in their operations, was initially funded to the tune of $40 million.
Kunaka said the rise in production can be attributed to the GDF “as some beneficiaries have ramped up their production”.
“A number of mines that were on the verge of closure were resuscitated by the loans availed under the fund. Deliveries were boosted by a combination of miners’ loyalty emanating from the support under the GDF and the increased visibility of FPR on the market as evidenced by the public relations efforts which have seen FPR teams visiting the major gold producing areas.
“Further, the continued payment for gold in cash (a combination of 60 percent USD and 40 percent bond notes in cash) and spot payments have assisted in enticing miners to deliver to FPR,” he said.
However, the $40 million has since been exhausted and new resources continue to be pooled by the RBZ. Although no exact figure of the new resource envelope could be obtained, FPR says it has already disbursed $54,3 million under the GDF.
This means the initial $40 million fund has been surpassed by $14,3 million — underlining the popularity and centrality of the GDF in turning around the fortunes of the gold sector.
“The disbursements of funds under the GDF stand at $54,3 million. Additional funds are continuously being provided by the Reserve Bank of Zimbabwe to ensure as many small- scale miners benefit,” Kunaka said .
“At some point in the next two years, the Fund will become self-sustaining as the first beneficiaries start making repayments.”
Gold production in Zimbabwe was on the rise in the ‘90s before spectacularly falling to three tonnes in 2008.
But production has been rising since 2009, and hit 23,2 tonnes last year.
