Mining, not farming, is now Zimbabwe’s economic mainstay — and it’s thanks to gold
The sector’s strong performance was underpinned by record gold output and an impressive showing from Zimplats
Zimbabwe has earned $2.2bn from its mining sector, which has remained vibrant despite the county’s economic challenges.
Zimbabwe is richly endowed with a large trove of minerals but has failed to reap maximum benefits from the sector, due to bad management and lack of capital to fund operations.
Mining accounts for more than two-thirds of Zimbabwe’s export earnings but the sector has seen some mines close, including the SA-owned Metallon Group, due to a US dollar shortage.
The top six minerals that have contributed the bulk of export earnings are gold, platinum, diamonds, chrome, coal and nickel.
Speaking at the Chamber of Mines mining sector performance briefing in Harare on Monday, Reserve Bank of Zimbabwe governor John Mangudya said mining had overtaken agriculture as the anchor of the country’s economy.
“The mining sector accounts for about 65%-70% of exports in this country. As a country we have raked in about $3bn in export earnings since the start of the year. As at end of October we had received about $2.2bn in cash receipts."
Mangudya said a record high gold output of 30 tons and an impressive performance by platinum producer Zimplats had contributed a significant chunk of the foreign currency earnings.
Deputy mines and mining development minister Polite Kambamura said gold producers that sell the metal to the government would now keep 55% of their sales in US dollars, up from 30% previously, as an incentive.
He said this would help ensure operators remain viable, following the closure of some mines due to foreign currency shortages.
Kamambura said Zimbabwe had the potential to produce 100 tons of gold annually by 2023.
He warned large gold producers that the government would clamp down on lack of transparency.
“On gold, we still feel that there is a lot that needs to be done. That is why we are targeting to produce 100 tons by 2023. We have observed that there have been some under-declarations from large-scale operators….
“We need to come up with measures to monitor actual production.”