Government has warned large scale gold mining companies which are under declaring their production figures, saying the country could be losing out in potential revenue due to difficulties in determining the actual quantities of the yellow metal extracted.
Deputy minister in the Ministry of Mines and Mining Development, Polite Kambamura, told delegates attending the 2018 state of the mining industry survey breakfast meeting held in the capital on Monday that the sector was shrouded in secrecy with some of the big mining outfits now sending their gold stocks to Zimbabwe’s sole gold buying entity, Fidelity Printers and Refiners, through small scale and artisanal gold miners.
“We have noted with concern that we have big gold mining companies who have been under declaring output figures and some are even sending their gold to Fidelity Printers and Refinery through small-scale and artisanal miners. Very soon, we will come down hard on them” Kambamura warned.
“We need to come up with measures for us to get the actual production figures from these big mining companies. When some fill in the returns to say this month we produced 10 tonnes, we just take it like that. When the next month they say we produced 15 tonnes, we don’t question that either,” he added.
The 2018 state of mining survey report revealed that activities in the mining sector remained predominately concentrated on six key mineral categories namely gold, PGMs, diamond, nickel, chrome and coal, accounting for 95 percent of the value of minerals generated in 2018. Gold, however, continued to dominate in terms of contribution to total mineral revenue, accounting for 45 percent in 2018, compared to 40 percent in 2017.
Nearly 90 percent of players in the mining sector in Zimbabwe highlighted that, as from September this year, they have been experiencing production stoppages due to input shortages, with gold producers highlighting that production disruptions actually started in May this year.
On the two percent tax on electronic money transfer, all mining companies said the tax, which is paid up front, will be an additional burden to the mining sector, which is already operating in a punitive fiscal tax framework.
Average capacity utilization for the mining industry was 75 percent in 2018 compared to initial projection of 79 percent in the 2017 survey. This level, however, compares favourably to the 71 percent. The PGMs sector continues to operate at around 100 percent capacity utilization, while nickel is at between 60 percent and 70 percent and diamonds at between 70 percent and 80 percent, chrome at 80 percent. Gold recorded a decline in capacity utilization from 73 percent in 2017 to 71 percent in 2018.
The overall mining business confidence index for 2019 is +8, meaning that mining executives are slightly more confident about the mining business prospects for 2019. Despite being positive, the index for 2019 is lower than that recorded for 2018, which was 21,9.