Q1 gold output down 30% — report
ZIMBABWE’S total gold production in the first quarter of the year declined by 30 percent to 4,3 tonnes compared to 6,1 tonnes in the same period last year.
The yellow metal is one of Zimbabwe’s major foreign currency earners. Gold is expected to contribute US$4 billion to the US$12 billion the mining sector is expected to earn annually by 2023.
According to the first quarter Treasury report released last week, the decline in gold output was attributed to subdued productivity by artisanal and small-scale miners.
“Gold output during the first quarter stood at 4,311 tonnes compared to 6,152 tonnes produced in the same period in 2020 and 4,794 tonnes in the last quarter.
“The decline was mainly as a result of fall in production from artisanal and small-scale gold sector,” said the report.
Large scale miners produced about 2,3 tonnes.
“Large scale producers delivered about 2,291 tonnes during the first quarter of 2021 which is 11,2 percent higher than what was produced during the same period in 2020 while artisanal and small-scale gold sector delivered 1,586 tonnes, about 55,6 percent below the production of the same period in 2020, reflecting leakages through smuggling.”
Overally, the report stated that performance of the mining sector was mixed while on one hand, firm international prices and resuscitation of closed mines improved the performance of the mining sector.
“There were major drawbacks from a number of factors such as unstable power supply, heavy rains, which culminated in the flooding of shafts, working capital challenges and subdued demand for some minerals.
“Overall, platinum, diamonds and coal performed better than the previous quarter while gold, chrome and nickel suffered some declines,” it said.
During the first quarter, platinum output stood at 3,369 tonnes, a five percent decline compared to 3,544 tonnes produced during the same period in 2020.
However, this level of output slightly surpassed production for the previous quarter by 1,3 percent.
Going forward, platinum output is projected to improve as one of the major producer resumes production at the closed mine while other mines are also undertaking efficient enhancing measures.
During the period under review, nickel output stood at 3,284 tonnes and this was 16,6 percent and 22,1 percent below output produced in the comparable period in 2020 and in the previous quarter (Q4 2020), respectively.
“Reduced nickel output reflects low throughput from both primary and secondary producers.
“Output from the primary producers was 25 percent lower than the first quarter production in 2020.
“Similarly, this level of output was 44 percent lower than what was realised in the preceding quarter.
“The decrease in nickel output was against a surge in prices by about 39 percent in the first quarter compared to the same period in 2020 and 10,4 percent above the last quarter of 2020,” said the report.
Diamond production increased by 15 percent to 702 639 carats in the first quarter of 2021 from 611 331 carats produced in the same period in 2020.
The increase in production was registered from only two producers that were operational during the first quarter of the year with Treasury saying the output could have been higher if all players were producing.
“Furthermore, production was also driven by opening of the world economy and strong demand particularly from China.”
During the quarter under review, coal production stood at 596 753 tonnes compared to 462 140 tonnes produced during the same period in 2020. Producers were mainly constrained by delays in payments for coal deliveries, which adversely impacted on coal mining activities.
“Furthermore, production was also affected by limited absorption capacity during the first quarter due to non-operation of most of the units, which saw three producers also cutting back output as there was no off taker for thermal power,” said the report.
Following onset of the second wave Covid-19 pandemic during the first quarter of 2021, it said chrome production receded to 300 926 tonnes from 353 669 tonnes for the same period in 2020 and 311 495 tonnes in the fourth quarter of last year.
Of the chrome ore produced, about 74 percent was beneficiated and value-added and disposed as high carbon ferrochrome (HCF) while only 26 percent was sold as raw chrome.
“This is due to the favourable prices of HCF that prevailed during the quarter compared to those of raw chrome.
“Meanwhile, chrome producers have started modernising equipment and refurbishing their furnaces in order to boost production in response to increased demand in markets such as China and firming up of prices,” it said.