Walter Muchinguri recently in VICTORIA FALLS
The country’s gold industry requires $600 million in the next five years to optimise production to more than 50 tonnes. Gold Producers Committee chairman Noah Matimba said of that amount, $410 million would be for ramp up capital and the remaining $190 million would be sustenance capital.

Matimba told the Chamber of Mines meeting in Victoria Falls that ramping up production to above 50 tonnes will result in gold revenues reaching $1,8 billion by 2020.

He said that withstanding the absence of capital the country had the capcity to reach the target due to the extensive mineral resources that it has.

“The country has potential to reach 50 tonnes by 2020 due to the presence of extensive gold deposits coupled with idle capacity,” he said.

He however said that existing producers will need to improve efficiencies and expand current operations.

Other critical success factors for sustained growth and development, he said, included the resuscitation of closed mines, increasing installed capacity, the development of new mines, an improvement in efficiencies and reduction in costs.

“If these initiatives are implemented soon we may be able to improve output to 30 tonnes this year, compared to the projected 25 tonnes,” he said.

He noted that there was a need to attend to major challenges affecting the industry which include high electricity tariff of around USc12,8/ KWh compared to regional average of USc8 /KWh, high labour costs with a minimum wage of around $238 and at an average of $410/ ounce (36 percent of total compared to SA average of 23 percent of total) against low productivity levels of 33 ounces per year in Zimbabwe compared to 41 ounces per year in SA.

Other challenges, he said include high cost of consumables due to lack of economies of scale in purchasing, poor infrastructure and obsolete equipment also add to the high cost structure.

In addition he said the government should continue working on reducing the cost of doing business, improve the investment climate and properly benchmarked fiscal framework.

In this respect on-going doing business reforms are a welcome development and recent pronouncements on investment are a step forward.

Gold production in the country has been on a rise with mining industry report for the first quarter of the year showing that volumes produced during the first quarter of the year grew by 21 percent from 4,18 tonnes to 5,06 tonnes.

In terms of output small scale producers and customs millers recorded the biggest jump in production of 54 percent from 1,21 tonnes during Q1 in 2015 to 1,87 tonnes during the period under review, while secondary producers (Unki, Mimosa and Unki) recorded 33 percent growth in production to 0,49 tonnes from 0,37 tonnes.

Large producers recorded a 5 percent increase to 2,73 tonnes from 2,59 tonnes during the same period last year.

Earnings from gold were up 17 percent to $189,65 million during the period under review from $161,67 million in the prior comparable period.

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