Zimbabwe’s mining industry suffered from acute foreign currency shortages and erratic power supplies in 2019, missing most of its production target and throwing the country into a deep revenue crisis.
Mining accounts for more than half of the country’s export earnings.
Persistent macroeconomic challenges that have generally hamstrung the productive sector had the same bearing on the extractive sector in 2019, in particular a head ache around foreign currency retention thresholds in the capital intensive sector.
Latest figures obtained from the Ministry of Mines and Mining Development show that gold production in 2019 totalled 29,5 tonnes, about 10 tonnes below the annual target of 40tonnes.
The 40t target was set as a review of the initial 35t target as the sector saw a promising year.
However, gold miners remain locked in protracted negotiations with government for an increase of the foreign currency retention thresholds currency at 50 percent.
Reserve Bank of Zimbabwe Governor John Mangudya this week said gold deliveries to Fidelity Printers and Refiners (FPR) for the period January to 31 December 2019 were 27.66 tonnes, a decline of 17 percent from 33.29 tonnes recorded during the same period in 2018 .
“The decline, Mangudya said in his Monetary Policy Statement, is attributable to electricity challenges coupled with inadequate equipment for small scale miners to access deep gold reefs and gold leakages through smuggling,” Mangudya said.
“Future efforts to increase gold deliveries to FPR shall include enhanced capacitation of gold producers and formalisation of artisanal miners, coupled with rigorous monitoring of gold production and marketing.”
Gold prices being offered by the country’s sole gold buyer fidelity printers and refiners remain lower than what is being offered on the parallel market, prompting leakages mostly into neighbouring South Africa.
Despite the challenges in mining, investors see a bright future and continue to invest with one of the major primary gold producers Blanket Mine working on a US$8million solar power plant.
Blanket Mine shareholders Caledonia Mining Corporation Plc recently told Business Times they are in the market for three brownfield gold mines in Zimbabwe.
Mining, together with real estate and tourism have been identified as pockets of opportunity for investment in Zimbabwe’s turbulent waters.
Gold in 2016 contributed 2,6 percent of the GDP, 18 percent of exports and 28 percent of mining output, employing 7,1 percent of the labour force.
Diamond production was 2,1 million carats in the year under review, a far cry from the 3,1 million carats that had been targeted by the state diamond producer the Zimbabwe Consolidated Diamond Company (ZCDC).
Early into 2020, ZCDC announced a 4,1 million carat production forecast for 2020 on account of consolidation of investments in exploration, mining and processing to improve output.
High carbon ferrochrome production closed the year at 324,388 tons compared to the 419 000 tonnes Mines Minister Winston Chitando projected would be achieved in 2019 at the 35th International Chromium Development Association (ICDA) conference held in the Victoria Falls in May last year.
Chrome ore for 2019 was 1,6kmt against a production target of 1,9kmt for the year.
In August, chrome ore production looked certain to miss the annual target as production was just 50 percent of the projected volumes with only four months to year end.
Platinum production for the year was 13,856kgs while palladium was 11,639kg.
Lithium production closed 2019 at 62,622mt while coal and granite was 2,7million mt and 154,884 mt respectively. Nickel output was 16,277 mt in the 12 months