5 Reasons why Large scale gold miners are producing less than small scale miners
The Zimbabwean government for the better part of the year has been relying on gold that come mainly from small scale and artisanal miners who continue to lead on month to month gold output statistics against the giant large scale miners despite the fact that large scale miners boost of owning advanced machines and latest technology.
Shortage of Foreign currency
Large scale miners require large machinery and latest technology, these oblige serious maintenance to boost working and production, Zimbabwe unfortunately does not have the capacity or the technology required to produce machinery needed in large scale mining. Most large scale have been affected by high cost of spares and consumable, the current working conditions have been tough for large scale because they need foreign currency to buy spare parts to maintain their machinery. Some large scale mines for example Rio Zimbabwe had to suspend their operation due to lack of foreign currency.
Under declaring their output?
The Ministry of Mines and Mining development said that they have identified some large scale operators who have been under declaring their production, instead they have been selling their production through the small scale miners. While it might be true that some large scale miners are under producing, the government needs to address the operation of large miners to guarantee sustainability, miners who are experiencing cash shortages could have been forced to under declare their production, some of the gold is believed to be ending up in the black market.
Some claims are not economically viable for large miners.
While large scale miners revel of having modern and large machinery, they cannot operate in most gold deposit that are found all over the country due to the fact that those gold coasts will not provide them with a sensible return in cost, therefore some claims are only suitable for only small scale and artisanal miners to exploit because for large small firms to exploits in those areas it will be costly on their part.
Large scale miners are selling their production through small scale?
It is a shocking experience to believe that small scale miners can produce more gold than large scale miners who are invested with great knowledge, funding and professionalism in as far as the extraction of minerals is concerned. Miners in the small scale sector were receiving 75% of their money in USD while large scale firms were receiving only 30%, this promoted a situation where large scale miners would under declare their production in order to sell their gold through small scale miners who were getting enough foreign currency to sustain operations.
Large scale miners are underutilizing claims
Experts in the mining industry believe small scale miners own more than 60% of active gold deposits in Zimbabwe, with more than a million people exploiting gold resources under the banner of small scale and artisanal mining, although there are no official statistics to support these claims. These statistics give small scale miners a guarantee that they will produce more gold.
This article first appeared in the December 2018 issue of the Mining Zimbabwe Magazine