Harare, Zimbabwe — MININGREVIEW.COM — 18 September 2008 – Zimbabwe’s gold output plunged 44% in the first seven months of 2008 as miners grappled with power cuts, an overvalued local currency and delays in Central Bank payments.
Reporting from the Zimbabwean capital, Reuters quoted the country’s Chamber of Mines as saying that gold output had slumped to 2 624 kg between January and July this year, compared to 4 686 kg during the same period in 2007.
In Zimbabwe, miners sell their gold to the sole purchaser and refiner, Fidelity – a central bank subsidiary – and they receive 40% of their earnings in foreign currency.
“Issues of concern include delays in paying gold producers their U.S. dollar revenue. Data at hand indicates that there are some producers who have not been paid for deliveries made in 2007,” the chamber said in a statement.
Zimbabwe’s mining sector was rattled last year after the government had introduced a law compelling all foreign-owned companies, including mines, to sell 50% of their shares to locals as part of an empowerment drive. This led foreign investors to withhold funding for expanding existing operations, worsening the plight of a sector hit by soaring costs and mine closures in the last seven years.
Reuters reports that gold accounts for a third of Zimbabwe’s export earnings after the collapse of commercial agriculture, which some critics blame on President Robert Mugabe’s policy of seizing white-owned farms to resettle blacks.