Zimbabwe May Miss Gold Output Target as Price of Metal Declines
Zimbabwe may fall short of its gold production target this year as prices for the precious metal decline and energy shortages strain operations, the Chamber of Mines of Zimbabwe, an industry group, said.
Output may fall below an earlier projection of 17,000 kilograms (37,479 pounds), the chamber, whose members account for 90 percent of all mineral production, said in a report published today. In 2012, gold production was 14,743 kilograms, earning the country $1.9 billion.
The projection “may be difficult to achieve as commodity prices have not recovered much while systematic factors such as energy and sub-optimal cost structure remain prevalent,” according to the report.
Gold slid 18 percent this year, falling into a bear market last month, as some investors lost faith in the metal as a store of value and equities rallied on mounting confidence the U.S. economy is improving.
Zimbabwe has the world’s second-largest deposits of platinum and ferrochrome after neighboring South Africa and also has reserves of diamonds, nickel, copper and coal. Miners operating in the country include Impala Platinum Holdings Ltd. (IMP) and Rio Tinto Group.
Platinum output is expected to rise to 12,500 kilograms compared with 10,524 kilograms last year, while production of nickel may jump to 10,000 metric tons from 7,899 tons. Diamond output is forecast to reach 16.9 million carats from 12 million carats, according to the country’s Ministry of Mines.
Inadequate infrastructure, political uncertainty surrounding expected elections and sluggish export demand are also hindering mining operations, the chamber said.
The industry is affected by various taxes that “weigh down on the viability and competitiveness of the sector,” according to the report.
Gold for immediate delivery declined for a seventh straight day, falling 0.6 percent to $1,377.15 an ounce by 10:33 a.m. in London.
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