Zimbabwe continue to be banned on LBM

LONDON – Zimbabwe will continue to be banned from the London Bullion Market (LMB) as a result of the continued failure of the country to produce the required target gold output to be an LMB member.

LMB is a wholesale market for the trading of gold and silver. Trading is conducted among members of the LBM, which is overseen by the Bank of England. All members in this market are required to produce a minimum of 10 tonnes of gold or silver per year.

Another requirement for listing on the LBM is that the refiner must have an established track record of at least three years of producing the refined metal.

Last year, Zimbabwe’s Fidelity Printers and Refineries, a subsidiary of the country’s central bank and sole buyer of gold from miners in the country, was de-listed by LMB after failing to hit the minimum required target of 10 tonnes of gold.

The country’s mining sector performed badly due to the economic melt down and political instability caused by the previous ZANU-PF regime of President Robert Mugabe.

However, in a report released last week, mines representative body, the Zimbabwe Chamber of Commerce said only one tonne had been produced by the country’s miners so far for the first six months of 2009 since January, diminishing any hopes of a quick return to the LBM due to slim chances of the country producing the required target of 10 tonnes.

"Little activity was realized during the first half of 2009 as most operations were placed under care and maintenance. But our hope is that since mid-July most of the gold mining operations will increase," said the
Zimbabwe Chamber of Mines in a statement.

The Zimbabwe Chamber of Mines called for funding support to restart operations and raise gold production capacity to optimum levels at all the industry players.

"The efforts to build up production have been affected by challenges to secure funding to restart and for increasing production. The recovery of the sector can be significantly faster if the financial support needed was to be secured," the organization’s statement said.

Meanwhile, Zimbabwe’s largest gold producer, Metallon Gold, is preparing to bring back into production two more of its closed mines before the end of the month.

The Johannesburg listed company said preparatory work to re-open Redwing Mines in Mutare and Arcturus near Harare was now at an advanced stage.

Two Months ago the gold firm opened How Mine in Bulawayo and Shamva Mines, north of Harare, both now producing 2 000 ounces per month.