Gold deliveries fall by 18% in February

Fidelity Gold Refinery (FGR) has reported an 18.06% decline in gold deliveries, with total deliveries falling to 2,568.2544 kilograms (kgs) last month, compared to 3,134.3456kgs in January. The decline has been attributed to adverse weather conditions and a slow start to the year, according to sources close to the matter.

Small-scale miners contributed the majority of the deliveries, accounting for 1,640.3149kgs, while large-scale miners delivered 927.9395kgs last month.

In an interview with NewsDay Business, Payne Kapfuwa, the Chief Executive Officer of the Young Miners Federation, explained that seasonal rains had a significant impact on small-scale mining operations. "Rains affect small-scale mining because most of our shafts are not properly reinforced. They are not strong enough for miners to go underground safely. This limits production during the rainy season," he said.

Kapfuwa also noted that the beginning of the year typically poses additional challenges due to the holiday season, when many small-scale miners do not have sufficient reserves to purchase essential consumables. "At the beginning of the year, we usually face challenges because we are coming from the holidays. Many small-scale miners do not have reserves to buy the consumables needed to boost efficiency and production," he explained.

Beyond seasonal weather disruptions, economic factors have compounded the difficulties faced by miners. Importing essential mining equipment, chemicals, and other consumables has become increasingly difficult due to high costs and ongoing foreign exchange shortages. The sector's woes are further exacerbated by the recent adjustment of the export retention threshold, which was raised to 70%, up from 75%. This means exporters, including small-scale miners, will have access to even less foreign currency.

"The economic environment hasn't been friendly for small-scale miners. Challenges in bringing in equipment, chemicals, and other consumables have slowed down production," Kapfuwa stated. "If we formalise operations, we can reduce these seasonal and economic challenges."

Kapfuwa emphasized the importance of formalising small-scale mining operations to ensure their long-term growth and sustainability. "It's crucial for ensuring the growth and sustainability of small-scale mining," he said. Many of the challenges faced by small-scale miners, from production disruptions to financial struggles, stem from the informal nature of their operations, making it difficult for them to plan, budget, and sustain their activities effectively.

"By formalising and professionalising their operations, small-scale miners can improve their access to financing, ensure better safety standards, and achieve more consistent production," Kapfuwa added. He also noted that as the year progresses, production typically improves. However, he stressed that for the sector to remain stable, more investment in infrastructure and greater policy support would be needed.

Gold remains Zimbabwe's most important export product, and the country's largest foreign currency earner. As such, the challenges facing the small-scale mining sector could have significant implications for the national economy.