Gold Revenue Rises 10.17% in April
Zimbabwe’s gold sector has witnessed a significant upswing in revenue, with earnings from gold sales climbing by 10.17% in the first four months of 2024 compared to the same period last year.
By Rudairo Mapuranga
This growth, albeit impressive, could have been even more substantial if official purchases had been intensified to capitalize on the current gold price rally.
Revenue and Sales Data
According to data released by the Reserve Bank of Zimbabwe (RBZ), the nation gained US$400.02 million from gold deliveries between January and April 2024.
This figure marks an increase from the US$363.09 million recorded during the same period in 2023. A total of 6,462 kilograms of gold were sold, which presents an intriguing contrast to the 8,431.78 kilograms reported by Fidelity Gold Refinery (FGR) for the four months, potentially indicative of strategic selling or discrepancies in reporting.
Monthly Performance
April emerged as a particularly lucrative month, with gold prices soaring to US$70,350 per kilogram. This surge resulted in revenue climbing to US$148.51 million, reflecting a 9.25% year-over-year increase. January, however, stood out as the highest-earning month within this period, with revenues peaking at US$151.13 million. Despite these gains, a notable decline was observed in March, where revenues dropped to US$105.51 million, marking a significant 32.40% decrease from the previous year.
Annual Comparisons
For the entirety of 2023, Zimbabwe’s gold revenue was recorded at US$1.78 billion, down from US$1.99 billion in 2022. The fluctuating performance across different months and years underscores the volatile nature of the gold market and the challenges faced by the mining sector.
Gold Price Trends
April 2024 witnessed gold prices reaching unprecedented highs, driven by robust demand from Chinese buyers and central banks. The price of gold closed at US$2,331.45 per ounce at the end of April, up from US$2,158.01 in March and US$1,999.77 in April 2023. This represents an 8.04% increase from March and a substantial 16.59% rise from the previous year. These price dynamics underscore the favourable conditions in the global gold market, which Zimbabwe’s mining sector partially leveraged.
Surge in Gold Deliveries
Complementing the rise in revenue, gold deliveries to Zimbabwe’s sole gold buyer, Fidelity Gold Refinery (FGR), also surged significantly. In April 2024, deliveries rose by approximately 31.4% compared to the previous month, driven predominantly by contributions from artisanal and small-scale miners (ASM).
Monthly Delivery Breakdown
April’s gold deliveries totalled 2,386.9067 kilograms, marking a significant increase from the 1,816.5413 kilograms delivered in March 2024. Notably, ASM contributions skyrocketed by about 58% to 1,218.2045 kilograms in April, compared to 770.9838 kilograms in March. Deliveries from large-scale gold miners also saw an uptick, rising by 11.78% to 1,168.7022 kilograms from 1,045.5575 kilograms in March. For the first time in two months, ASM deliveries surpassed those of large-scale miners, accounting for approximately 51% of the total deliveries in April.
Quarterly Performance
The first quarter of 2024 closed with total gold deliveries of 6,044 kilograms, slightly lower than the 6,194 kilograms recorded in the first quarter of 2023. This is a significant decline from the 7,694 kilograms delivered in the first quarter of 2022, which was a record-breaking year for Zimbabwe’s gold sector. Large-scale miners delivered 51.995% (3,143.0683 kilograms) of the total in the first quarter of 2024, slightly surpassing ASM, which contributed 48.004% (2,901.8006 kilograms).
Historical Context and Challenges
Historically, ASM has primarily contributed to Zimbabwe’s gold deliveries to FGR, accounting for over 61% of the total. However, gold deliveries declined by 15% in 2023 due to several challenges, including rising costs, power shortages, and government currency policies. Total deliveries to Fidelity in 2023 were 30.1 tonnes, down from the record 35.6 tonnes in 2022.
The drop in deliveries was more pronounced among small-scale producers, who delivered just 18.6 tonnes in 2023, a sharp 23% decrease from the 24.1 tonnes in 2022, bringing figures back to 2021 levels. In contrast, output from large producers remained relatively stagnant at 11.4 tonnes in 2023, showing minimal growth from the 11.2 tonnes delivered in both 2022 and 2021.