24 January 2016

Zimbabwe: Mining Production Depressed

Production of most minerals declined in the nine months to September 2015 from the same period in the previous year due to depressed international prices and rising production costs.

This was revealed in the latest report by the ministry of Macro-Economic Planning and Investment Promotion.

According to the 2015 4th Macroeconomic Bulletin, all the major minerals, except gold, declined during the period. Chrome production was down by 54,59%, from 307 974 tonnes down to 139 858 tonnes during the same period in 2014.

Minerals that recorded declines include coal, cobalt, platinum, nickel and palladium, among others.

"This can be attributed to depressed international prices on the back of a weak economic growth outlook in commodity markets such as China and the Euro Zone, rising production costs against a background of declining capacity utilisation resulting in high average costs, unfavourable mining fiscal regime and infrastructure deficits," the report said.

It said efforts to speed up the beneficiation strategies should be expedited.

"Further, the review of the new mining fiscal regime and amendments to the Mines and Minerals Act should be accelerated so that the country benefits from this waste resource," the ministry said.

The report showed that commodity prices had generally declined, with gold retreating by 10,07%, while platinum and nickel prices significantly declined by 22,38%, 33,08% respectively over the period January to September 2015.

Gold prices have been on a declining trend since the beginning of the year, it said.

According to the World Bank Commodity market data, gold price was quoted at $1 250,75 per ounce (oz) during the beginning of the first quarter of 2015 and fell to $1 181,50 per oz by the end of second quarter. It further fell to close the month of September at $1 125.77.

On average, the price declined by 10,07% from January to September 2015, the report said.

It said the continued appreciation of the US dollar since the first half of 2015 eroded gold's attractiveness as an alternative investment asset.

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