Gold

Gold

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DEPRESSED commodity prices, particularly for gold and platinum, are presently affecting the growth of the mining sector, a local brokerage firm has said.

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Gold prices have dropped 8 percent to US$1 200 per tonne on a year-on-year basis, while platinum prices slipped 21 percent to US$1 147 per tonne in the same period.

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MMC Capital Research indicated that the first quarter decline in mining royalties to US$19,6 million from US$79 million in the comparative period a year earlier mimicked the slump in metal prices on the international market.

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“If the sector maintains this rate it has the capacity and potential to create substantial impetus for economic growth and value addition . .

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“Opportunities exist throughout the mining cycle from exploration, mining production, marketing and downstream industries. There are also opportunities for joint venture partnerships on existing low capacity running projects as well as new ventures. The Mines and Minerals Act [Chapter 21:05] of 1996 governs the local mining sector.

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“With the new thrust of mining as the cornerstone of economic growth, it’s imperative to resuscitate existing mines on care and maintenance to pre-1998 levels as well as invest in exploration and new mining development.

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“We also need to focus on value addition, beneficiation and linkages between mining sector and other sectors of the economy, particularly manufacturing.

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“To achieve this we view the need for a common national vision coupled with policy consistency. We need to attract investment into this sector as well as improve critical infrastructure, i.e. electricity, roads and water supply,” said MMC capital in a recent research note.