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Oliver Kazunga, Senior Business Reporter
ZIMBABWE’S gold output is projected to reach 20 tonnes by the end of next year, Finance and Economic Development Minister Patrick Chinamasa announced yesterday.

Presenting the 2016 national budget, he said the country would close 2015 at 18.7 tonnes of the yellow metal despite the weakening of the mineral prices on the international market.

“In 2016, overall gold production from all producers is projected at 20.1 tonnes, up from this year’s anticipated 18.7 tonnes. This  is notwithstanding softening of gold bullion prices,” he said.

Chinamasa said royalty on gold produced by primary and small scale producers was reduced from seven percent to five percent and seven percent to three percent respectively, with effect from October 2014 in response to declining gold prices.

“Furthermore, the royalty rate for small scale producers was further reviewed downwards from three percent to one percent in September 2015 to curb leakages.”

As a result, deliveries to Fidelity Printers and Refineries from informal, small and large scale producers  have increased,” he said

“Gold deliveries from small scale miners to Fidelity, which were only 1.7 tonnes in 2013, registered 5.9 tonnes for the period January to October 2015.

“In this regard, the government support for gold beneficiation is yielding desired results,” said Minister Chinamasa

On the outlook, the mining sector is expected to rebound, growing by 2.4 percent on the back of planned investments, and largely driven by strong performance of gold, chrome, coal, nickel, platinum and diamonds.

The country is well positioned for readmission to the London Bullion Market Association (LBMA) to which it was suspended in 2008 when production plummeted to below the minimum annual prescribed level of 10 tonnes given its production figures now.

The government through the Ministry of Mines and Mining Development has infact applied for readmission to the LBMA.

Over the years, the government has come up with a number of policy interventions as part of efforts to boost gold output.

Since January 2015 Fidelity Printers and Refineries was mandated to be the sole gold buyer in the country to curb smuggling.

Early this year, Reserve Bank of Zimbabwe governor John Mangudya announced that the government was setting aside $50 million seed capital for accelerated gold production through Fidelity Printers and Refineries.

The government has targeted 30 tonnes of gold and $1,5 billion revenue in five years.