25 January 2013

Zimbabwe Mineral Production Down in 2012

Zimbabwe's mineral production in 2012 was lower than in previous years, with gold the only major mineral to post significant growth.

According to latest figures from the Chamber of Mines, mineral production excluding the December figure for coal was US$1,86 billion, which was lower than the US$2,01 billion reported in 2011.

Analysts say even if the December coal production were to be added, it would not result in any significant change as average monthly production for the mineral was at US$7,5 million.

Gold production in 2012 rose 18,94% to US$782,75 million from 2011 but at an output of 14 742,99 kg fell shy of a targeted 15 000kg. The major gold-producing mines reported record production for the year on the back of improved investment in exploration.

However, lower platinum production weighed down the mining industry's overall performance. Platinum miners last year scaled down production owing to a sharp increase in costs largely attributed to the hike in mining licence fees and taxes which ballooned input costs against falling global prices. The white metal's prices were weak due to a slowdown in the automotive industry.

Platinum production in Zimbabwe last year was 10 524kg, a decrease of 2,79% from 2011, and fell far short of a forecast 12 900kg. As a result, the value fell to US$464,51 million from US$538,27 million the previous year, a decline of 13,7%.

Economists have said the mining sector is the only sector with growth potential and to a lesser extent, agriculture and tourism.

The Finance ministry revised upwards the growth forecast for the mining and quarrying sector in 2012 to 16,7% from 15,9%, after increased investment in exploration and development, particularly in the gold sector.

Mining contributes 13% of the country's gross domestic product (GDP), almost matching the 14% contributed by manufacturing. Analysts believe if key challenges facing mining such as inadequate capital and energy supply constraints are overcome, the sector can contribute as much as 18% to GDP by 2015 and well above 25% by 2020.

Markets analyst Tafadzwa Denya said due to short-term stresses, capacity for overall autonomous growth of the manufacturing sector was limited and credit was constrained for most sectors, but a large part of the mining sector could still attract foreign direct investment.

Denya said the driving power in the mining sector was subdued as the country was not able to take full advantage of the global boom in mining prices. High carbon ferrochrome production amounted to 137 534 tonnes at US$156,75 million, less than the targeted 155 000 tonnes.

Total raw chrome output was 408 475 tonnes at US$48, 96 million. Most of chrome mines are currently under care and maintenance owing to the low prices currently prevailing in the sector and the high operating costs.

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