Tough times for gold producers

goldDosman Mangisi Mining Correspondent
THE decline in gold trade at the London Bullion Market has induced a strain on the local gold sector forcing some miners to shelve operations. Low commodity prices being experienced across the globe have a crippling effect on local producers despite an increase of up to 30 percent in output volumes, the Chamber of Mines Zimbabwe (CoMZ), noted.

More than 1,500 claims of gold have been forfeited in the Midlands province alone so far this month, according to the Ministry of Mines and Mining Development. Small-scale miners are the major casualties as most of them are still battling with regulatory and compliance requirements.

Power supply factors and a multiplicity of taxes in the sub sector, also pose a threat to the viability of the sector. Chairman of Silobela-based Turtle 54 Gold Mine in Kwekwe, Arthur Nkiwane, says power cuts and increased operational costs had negatively affected output.

“The decline of gold prices has put us in hard times given the rise in costs of mining operations. Gold is trading at $33 per gramme from $40 as of January this year. “In 2013 it was trading for almost $60,” said Nkiwane.

He said load shedding has led to reduced working hours and a fall in output. “This has seen our production in the fourth quarter going down by almost 2kg from 8kg per month,” said Nkiwane. The chairman said the prevailing market prices were not good for miners as most of them were struggling to set up crushing and milling plants.

“We could’ve finished setting up our crushing and milling plant but we’re now crippled,” he added. Managing director for Chimona Mines in Shurugwi, Marufu Sithole, who is also ZMF national technical advisor, complained that statutory charges for the mining sector were too high.

He urged the government to level the playing field by revising its rates and taxes. Marufu operates a gold milling centre with four stamp mills and employs 55 people.

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