Gold production target reviewed

Gold production target reviewed
Published: 22 July 2017
THE government has revised downwards its gold production target of 28 tonnes to 24,5 tonnes for this year due to loss of production in January and February largely as a result of heavy rains that flooded most mines.

Small-scale miners were the hardest hit by the rains forcing many to suspend operations, while big corporates also slowed down production.

Addressing delegates at the Mining, Engineering and Transport (MineEntra) 2017 conference in Bulawayo yesterday, Chamber of Mines of Zimbabwe president Batirai Manhando said gold output was expected at around 24,5 tonnes in 2017 from 23,2 tonnes in 2016.

"Gold to largely benefit from favourable prices [improved viability] and continued support for small-scale miners (SSMs) is expected to spur gold output," he said.

Manhando said the anticipated ramp up at key mining houses on the back of expansion projects such as Metallon, RioZim, Blanket Mine and Freda Rebecca would also spur production.

Platinum output, Manhando said, is projected at 15,5 tonnes in 2017, up from the 15,1 tonnes in 2016. The increase was largely a result of a rise in production at Zimplats open pit and Bimha redevelopment.

He said subdued platinum prices, however, continue to threaten the viability of producers.

Nickel output is also expected at 18 000 tonnes in 2017, from 17 743 tonnes in 2016.

As of 2016, 62% of nickel came from secondary producers, he said.

"In line with the above, the outlook for nickel is largely influenced by activities in the PGMs sector [secondary producers to continue boosting nickel output]. The primary producer for nickel is expected to ramp up production on the back of completion of scheduled maintenance of plant and equipment," he said.

Chrome output is expected at 375 000 tonnes in 2017, up from 208 000 tonnes on the back of the increased number of players arising from the release of ground by Zimasco.

Anticipated favourable prices are also expected to improve viability of chrome producers, boosting chrome ore output

Coal output is expected to recover to 3 million tonnes in 2017 spurred by a recovery in coal prices and turnaround strategies being implemented at Hwange Colliery.

In the diamond sector, Manhando said resolution of disputes related to consolidation of the sector is expected to result in improved diamond output to 2,5 million carats in 2017, up from 1,8 million carats in 2016.

He said the industry continues to face viability challenges on the back of high operating costs (characterised by high electricity tariff, high cost of funding and suboptimal fiscal charges).

"Compounded by capital shortages and foreign payment challenges, most mining houses are still struggling to breakeven, impacting adversely on the outlook of the mining industry," he said.

Notwithstanding some challenges, Manhando said average capacity utilisation across the mining industry increased from 60% in 2015, to 64% in 2016 largely benefitting from improved capacity utilisation levels in gold (77%, to 79%) and nickel (41% to 55%).

He said the since dollarisation of the economy in 2009, Zimbabwe mining sector has recorded sterling performance, with the sector having recovered by an average of 12% between 2009 and 2016.

The sector expected to grow by 6% in 2017.
- newsday
Tags: Gold,

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