Zimbabwe's gold boom signals new era of domestic capital formation

ZIMBABWE'S gold sector is increasingly demonstrating its potential to convert the country's mineral wealth into broader economic development, with Government and financial institutions supporting both small-scale miners and large producers, columnist Dereck Goto has said.

Goto said a formal training programme covering mining, environmental management and financial literacy had already been completed as part of a broader initiative targeting at least 1 500 small-scale miners.

He said the growing contribution of artisanal and small-scale miners to national gold production made their formalisation, financing and integration into the formal market an important economic priority.

"Small-scale miners already dominate Zimbabwe's gold production. So the sensible economic response is to formalise them, capitalise them, and make the official market sufficiently attractive for the gold to remain within the Zimbabwean economy," he said.

At the larger end of the sector, Goto highlighted developments at Shamva, where Mutapa Gold Resources, owned by Zimbabwe's sovereign wealth fund, has secured US$75 million from local banks to finance the development of the Shamva open-pit mine.

The mine currently produces about 24 000 ounces of gold annually, with the planned expansion expected to increase output to nearly 80 000 ounces per year.

Mutapa Gold Resources has set an even more ambitious target of reaching approximately 220 000 ounces annually by 2029.

Goto said the source of the US$75 million financing was particularly significant as it demonstrated the growing role of domestic financial institutions in supporting local productive capacity.

"We are looking at Zimbabwean financial systems providing substantial capital to expand a Zimbabwean state-owned mining company, exploiting a Zimbabwean resource and generating export earnings for the Zimbabwean economy," he said.

He described the development as an important example of domestic capital formation that deserved greater attention.

Goto also pointed to the broader monetary significance of gold, noting that the precious metal forms part of Zimbabwe's reserve assets alongside foreign currency and other holdings.

He said increased formal gold production could therefore contribute not only to higher export earnings but also to strengthening the country's reserve position and supporting monetary stability.

However, Goto warned that Zimbabwe must ensure the current gold boom translates into sustainable economic development by tackling gold smuggling, improving mine safety, addressing environmental degradation, increasing mechanisation and exploration, and ensuring greater value retention within the domestic economy.

"The real measure of Zimbabwe's success will therefore be what happens after the gold is sold," he said.

Goto said gold earnings should be channelled towards productive investments in electricity generation, roads, irrigation, manufacturing, exploration and industrial capacity.

He said the expansion of small-scale mining should similarly result in the creation of businesses and productive assets capable of surviving beyond the current commodity cycle.

Zimbabwe's gold production rose from approximately 26.5 tonnes in 2024 to a record 46.7 tonnes in 2025, with small-scale miners accounting for almost three-quarters of total output.

Gold generated about US$4.61 billion in export earnings during the period, while local banks are increasingly providing significant financing for the expansion of domestic mining operations.

Goto said the figures demonstrated the scale of Zimbabwe's gold economy under the Second Republic.

"Zimbabwe has always had gold beneath its soil. The more consequential development under the 2nd Republic is that more Zimbabweans are participating in extracting it, more of it is entering the formal market, and domestic capital is increasingly being mobilised," he said.