HomeGoldZimbabwe gold output plummets

Zimbabwe gold output plummets

New Dawn’s Turk Mine –
one of several that
are in the process of
re-starting production
Harare, Zimbabwe — MININGREVIEW.COM — 06 May 2009 – Zimbabwe’s gold output plunged 76% during the first four months of 2009, after most mining companies had shut down their operations by late last year at the height of the political crisis in the Southern African country.

Chamber of Mines president, David Murangari said the entire mining sector was struggling due to lack of capital to re-start and increase production. “The major challenge to the mining sector at the moment is the finance needed to resume production, as well as to re-start exploration and development of new deposits. This is particularly so for gold mines,” Murangari said in an email in response to questions from Reuters.

Murangari said gold output between January and April this year had stood at 335 kg. Production for the whole of last year had hit a record low of 3 072 kg from 6 798 kg in 2007. At its peak, Zimbabwe used to produce an average of 2 400 kg of gold a month.

Reuters reports that gold producers are now re-starting production after new rules allowed them to sell gold directly to the world markets, but uncertainty over ownership laws is likely to keep big mining houses away from exploring the country’s rich mineral deposits.

The country’s biggest gold producer, Metallon Gold, London-listed Mwana Africa, and Canadian-registered New Dawn Mining Corp and Caledonia Mining have plans to re-open their mines.

This is because Zimbabwe’s central bank relinquished its role as sales agent for gold in February, allowing firms for the first time to sell the metal and keep all the proceeds.

“There are several enquiries from new investors interested in investing in the mining sector. This is more so after the formation of the inclusive government,” Murangari said.