Africa’s regional bank, the African Development Bank (AfDB) says firming international gold prices, coupled with high demand from China and India is expected to drive Zimbabwe’s production.
“Gold prices have continued to rise to $1724,75 per ounce at the end of January 2012, having opened the year at $1 594,00 per ounce (and) the price increase is expected to attract new entrants into the industry,” said AFDB in its latest review.
It added that “Metal prices continued to recover from the downward trend of December 2011. In January 2012, gold and platinum prices firmed by 9 percent and 15 percent, respectively, while copper and nickel prices also increased by 8 percent and 10 percent, respectively,”
Gold started January at $1 594 per ounce and closed the month at $1 724 while platinum moved from $1407 per ounce at the beginning of January to $1 602 by January 30.
Information at hand indicates Zimbabwe’s gold production went up in the first month of 2012 compared to the same period prior year, following an increase in output from both primary and small-scale producers.
According to AfDB, Zimbabwe produced 1 153 kilograms (kgs) of the precious metal in January this year compared to 725 kg in the comparative period.
“In January 2012, small-scale producers delivered 240, 32 kgs of gold while primary producers delivered 812,84 kgs. A total of 1 153,16 kgs was therefore produced.”
Compared to January 2011, the bank added, a marked improvement in gold production can be observed, as small scale producers produced only 125,6 kgs while primary producers produced 599,2 kgs, a total of 724,8kgs.
In 2011, the mining sector experienced a growth rate of about 25,8 percent with mining exports growing by about 38,7 percent contributing about half of the exports in 2011.
The leading exports were platinum, contributing 45 percent and gold contributing 24 percent of the exports, and diamonds came third, contributing 10 percent.
Despite major challenges like lack of capital, erratic power supplies and political uncertainty especially give talk of early elections, mining is anticipated to remain the major driving force behind overall economic growth in 2012 and expected to grow by 12 percent.
Continued growth in the gold sector, from 44 percent at the end of 2011, is however under threat following government’s decision to increase royalties on gold from 4, 5 percent to 7 percent while those for platinum would double to 10 percent, effective January 2012.