Falling int'l gold prices hamper Zimbabwe gold recovery
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E-mail Xinhua, October 8, 2014
Depressed international gold prices are hampering the recovery of gold output in Zimbabwe as the returns are now insignificant to re-invest into operations, the Chamber of Mines said Wednesday.
Chamber president Alex Mhembere told a mining indaba in Harare that gold prices have dropped below the 1,200 U.S. dollars per ounce level compared to 1,340 U.S. dollars per once in July this year.
He said most mines were currently operating slightly above 50 percent of their capacities due to lack of finances for recapitalization.
"Growth in the sector is expected to be moderate due to the lack of capital investment in mineral development and exploration, " he said.
Zimbabwe's gold output, the leading foreign currency earner in the mining sector, dropped from a peak of 27 tonnes in 1999 to 4 tonnes at the height of the economic challenges in 2008, before it started picking up to 14 tonnes in 2013.
Production is expected to slightly decrease to 13.8 tonnes in 2014 due to weakening prices, power shortages, obsolete equipment and inadequate funding for recapitalization.
Envisaged low output for gold, platinum and diamond would also drag down growth in the mining sector to -1.9 percent this year from the initial projection of 10.8 percent.
Zimbabwe's mining sector had been on a rebound over the past few years, with its contribution to GDP rising from 8.1 percent in 2009 to 16 percent last year.
Mhembere attributed this rebound, which has been averaging 20 percent in the last five years, to old reserves which were now fast depleting.
He, therefore, called for resuscitation of existing mines currently on care and maintenance and for more investment in exploration and new mining development to revamp the sector. Endi
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