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Zimbabwe's gold output surges 33%
30 Oct 2024 at 07:53hrs | Views
Zimbabwe's gold production surged by 33 percent in the third quarter of 2024, with output rising to 10.3 tonnes, compared to 7.7 tonnes in the previous quarter, according to official data from Fidelity Gold Refinery (FGR). Over the first nine months of 2024, cumulative gold production also saw an increase of 7.2 percent, reaching 24.1 tonnes, up from 22.4 tonnes in the same period in 2023.
The improved output is largely credited to the reversal of a 15 percent Value Added Tax (VAT) on gold deliveries, a decision made through Statutory Instrument (SI) 105 of 2024. This policy shift, enacted in July after extensive discussions between the government and mining stakeholders, aimed to curb the side-marketing of gold, which had been encouraged by the tax.
"The reversal of the 15 percent VAT on gold deliveries has incentivised producers in the sector," said economic analyst Ms. Chipo Warikandwa. She noted, however, that other constraints, particularly energy shortages, remain a challenge for the mining industry. "It is crucial for authorities to address power challenges and other constraints hampering production," she added.
According to the Chamber of Mines of Zimbabwe, mining sector growth has been stunted by multiple taxation issues, high royalties, capital gains taxes, and steep fees and levies. These challenges, along with the demand for improved beneficiation processes, continue to weigh heavily on production costs and industry expansion.
Mining remains a cornerstone of Zimbabwe's economy, with significant contributions to Foreign Direct Investment (FDI), export revenues, and government income. The sector accounts for 70 percent of FDI, 80 percent of exports, 19 percent of government revenues, and provides direct employment for 3 percent of the formal workforce, according to the Zimbabwe Investment and Development Agency (ZIDA).
In the gold industry, artisanal and small-scale miners continue to play a crucial role, accounting for 60 percent of the country's total gold output. Between January and September 2024, small-scale miners contributed 14.5 tonnes, while primary producers delivered 9.6 tonnes.
Gold is Zimbabwe's leading export earner, and the government has set an ambitious production target of 35 tonnes for 2024, up from 30.1 tonnes in 2023. By next year, gold exports are projected to generate US$4 billion, rising from the current US$3 billion, underscoring the mineral's pivotal role in Zimbabwe's economic growth.
The improved output is largely credited to the reversal of a 15 percent Value Added Tax (VAT) on gold deliveries, a decision made through Statutory Instrument (SI) 105 of 2024. This policy shift, enacted in July after extensive discussions between the government and mining stakeholders, aimed to curb the side-marketing of gold, which had been encouraged by the tax.
"The reversal of the 15 percent VAT on gold deliveries has incentivised producers in the sector," said economic analyst Ms. Chipo Warikandwa. She noted, however, that other constraints, particularly energy shortages, remain a challenge for the mining industry. "It is crucial for authorities to address power challenges and other constraints hampering production," she added.
Mining remains a cornerstone of Zimbabwe's economy, with significant contributions to Foreign Direct Investment (FDI), export revenues, and government income. The sector accounts for 70 percent of FDI, 80 percent of exports, 19 percent of government revenues, and provides direct employment for 3 percent of the formal workforce, according to the Zimbabwe Investment and Development Agency (ZIDA).
In the gold industry, artisanal and small-scale miners continue to play a crucial role, accounting for 60 percent of the country's total gold output. Between January and September 2024, small-scale miners contributed 14.5 tonnes, while primary producers delivered 9.6 tonnes.
Gold is Zimbabwe's leading export earner, and the government has set an ambitious production target of 35 tonnes for 2024, up from 30.1 tonnes in 2023. By next year, gold exports are projected to generate US$4 billion, rising from the current US$3 billion, underscoring the mineral's pivotal role in Zimbabwe's economic growth.
Source - The Herald
