Gold miners in trouble

Three-quarters of Zimbabwe’s gold miners could shut down in three months because of the depressed prices and high royalties and taxes, a representative of the gold producers said yesterday.

Chamber of Mines chairman for the gold producers committee Ian Saunders told a parliamentary committee that there were serious viability issues in the gold industry which if not addressed could see 75 percent of the producers shutting down in 90 days.

“There are serious viability issues in the gold industry and our assessment is that, within 90 days, 75 percent of the gold mines in this county will be shut unless there are policy changes. In short, royalties are too high,” he said.

“We must understand that Zimbabwe is a primary producer of minerals and all efforts must be focused on the growth environment of the primary sector.

“In our view there is no policy thrust to fundamentally drive primary mineral exploration, development and growth in the industry. It must be understood that no single producer could build a refinery hence Fidelity Printers built one and no single platinum producer can build a refinery but three platinum producers together can build a refinery.”

The gold price reached an all-time high of US$1 920.30 an ounce in September 2011 but ended at US$1 201.13 per ounce on December 31 last year.

The threat to shut down gold mines comes at a time when Zimbabwe is seeking re-admission into the London Bullion Marketing Association.

Secretary for Mines Francis Gudyanga said Zimbabwe wanted to apply for readmission within the first quarter of this year.

It was removed in 2008 after gold production declined to just over 3kg a year.
Production has been picking with 14 tonnes being produced in 2012 while last year’s target was 17 tonnes.

Gudyanga said the government would be implementing various measures to ensure that all gold produced in the country was channelled through Fidelity Printers and Refineries, which resumed operations last month.

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