18 January 2018
   
Polls in '4 to 5' months: Mnangagwa
$430k cocaine woman blames Brazil firm
Tobva tadii paya trio bailed after 3mths
Businessman fleeces clinic of $27,000
Soldiers deployed all over rural Zim: MDC-T
MDC-T’s Mudzuri begs ZCTU for support
Moyo claims CIO spy killed during coup
Activist wants ED, Chiwenga at Hague
MORE NEWS
Bond notes here to stay, says Chinamasa
South Koreans in $70m Zim agro-project
MORE BUSINESS
Hubby bashes Star FM anchor in love row
$18/yr subscr too much for musicians
MORE SHOWBIZ
Caps bid to rehire star forward Nhivi
Mourinho says 'relaxed' about Sanchez
MORE SPORTS
A view beyond the Zimbabwe coup
'Shit-hole': Just Take moral high ground
MORE OPINION
 
Economy: the need for a paradigm shift
Trump rage ignores truth: A response
MORE COLUMNISTS
 
 
Mining sector seen growing by under 6pc
23/05/2014 00:00:00
by Business Reporter
 
Mining sector facing viability challenges ... Alex Mhembere
 
RELATED STORIES
Exploration fee adds to miners’ burden
Revise levies to save miners, govt told
Minister slams ZMDC ‘improper interactions’

CHAMBER of mines president Alex Mhembere says the country’s mining sector will grow by less than 6,5 percent this year due to viability problems and limited investment.

Speaking at the Chamber of Mines AGM on Friday, Mhembere said the gold sub-sector was experiencing severe viability challenges on the back of depressed commodity prices and high operating costs.

“It is important to note that while the mining sector led the 2009-12 economic rebound with an average annual growth rate of 20 percent, the sector is now showing signs of fragility registering a growth of only 6,5 percent in 2013 and expected to slow down further in 2014,” he said.

Mhembere said gold was one of the main sub-sectors of the mining industry, contributing 29% of the total value of mineral output in the country. The sector has witnessed a 31 percent decrease in prices since the beginning of the year.

Gold production has been on a free fall with monthly average output having fallen by 15% from 1230 kg in 2012 to 1058 kg as of February 2014 and, without interventions, dip was expected to continue.

“Most gold producers have been struggling to meet their operating costs characterized by sub-optimal electricity tariffs, coupled with labour, capital shortages and high tax,” said Mhembere.

According to official figures Zimbabwe produced 831,3kg of gold in February, down from 926,8kg in January. The decline was mainly on account of production slippages from large-scale producers.

In February, small-scale gold producers increased their output to 190,35kg from 161,91kg produced the prior month. On the other hand, large-scale producers’ output slumped to 740,99kg in February from 764,88kg.

Platinum output went up marginally to 1 044kg from 1 015kg. PGMs such as palladium and rhodium output increased from 809kg and 93kg to 832 kg and 96kg, respectively.

“International market prices for most mineral products remained subdued, due to depressed demand stemming from slackening emerging market growth,” the Finance ministry said.

The Chamber of Mines said Zimbabwe’s total gold earnings slumped 20 percent to $626 million in 2013 from $783 million realised prior year.

This comes as escalating production costs, limited access to long-term capital and depressed global metal prices continued to threaten the mining industry’s viability.



Advertisement

The yellow metal’s earnings constituted 32 percent of the $1,98 billion total minerals earnings, which marginally increased by six percent from $1,86 billion achieved in 2012.

The chamber president said metal prices across the board are determined on the world market which means that revenues are also determined on the same market.

“This means mining companies are price takers and have no control over their revenues, thus to succeed mining companies should focus on other variables such as costs and efficiency,” said Mhembere.


 
Email this to a friend Printable Version Discuss This Story
Share this article:

Digg it

Del.icio.us

Reddit

Newsvine

Nowpublic

Stumbleupon

Face Book

Myspace

Fark

 
 
 
comments powered by Disqus
 
RSS NewsTicker