Mining Industry Falters During First Quarter, As Foreign Currency Delays Bite
The country’s mining sector first quarter (1Q) performance points to a negative trajectory on account of weakened gold output since beginning of the year due to foreign currency delays to producers, preliminary data from the industry watchdog, Chamber of Mines of Zimbabwe (CMOZ) suggest.
Earlier this year, the Central Bank reported that gold deliveries went down by 10 percent during the period and this has been largely due to delays in foreign currency allocation which were taking up to 12 weeks.
This has slowed production in gold, and any upset in gold product spells doom to the overall mining sector as gold constitutes 34 percent of all mineral output.
Speaking at a press conference today, Chamber of Mines of Zimbabwe chief executive Isaac Kwesu said a detailed report to be out in the next few weeks is unlikely to change preliminary findings.
“We are still consolidating and validating the data we have compiled. By the time we get to our conference that information will be available. But preliminary figures just indicate that the first quarter was not a good performing period for our mining industry as most key minerals recorded some negative growth,”
“The systematic challenges across most minerals have a lot to do with delays in allocation of foreign exchange which has improved to a larger extent. You would see on weighted basis gold constituted the biggest chunk of the mining industry, so any downside factors that undermine gold have an overall impact on the overall performance,” said Kwesu.
He however said, in recent weeks foreign currency allocation to miners have seen a significant improvement with time lag for payments from the Central Bank having been narrowed to two weeks and this is expected to see the sector gain lost ground in the second quarter.
The development comes at a time when the Zimbabwe Mining Annual Conference is around the corner to be held in Victoria Falls from May 29 to June 1.
Amongst key issues to be discussed will be strengthening strategies to harness gold and platinum metals which have been identified as the hallmark of the country’s mining future.
CMOZ president, Batirai Manhando said the conference will seek ways to achieve the government targets of attaining 100 tonnes of gold by 2023 and 50 tonnes of platinum by 2030.
“We will have dedicated symposium which will intensively discuss gold and platinum industries broad strategies in line with the need to unlock the potential in the two minerals. The session on the gold industry will discuss strategies for achieving the government’s gold output target of 100 tonnes by 2023, while the platinum session will explore strategies to achieve 50 tonnes of platinum by the year 2030 and maximize the contribution of platinum resources to the economy,” Manhando said.
Zimbabwe envisions 40 tonnes of gold by year end, but continued foreign currency shortages are likely to undermine efforts to reach the target.