Zimbabwe poised to be the next gold leader

HARARE – Zimbabwe, the country which used to have over 1,00,000 per cent inflation, has done everything to cash in on the gold boom witnessed in the world during the past year.

As a result, the country’s gold production has gone up by almost 35 per cent to 4.2 tonnes last year. This is a remarkable recovery fro Zimbabwe and  its mining sector despite erratic power supply.

The 2009 figure was up from 3.1 tonnes the previous year. However the recovery process within the gold and mining sector in general was affected by the erratic power supply and the critical shortage of working capital.

The southern African country was once the third-highest gold producer in Africa, with a peak production of 27 tonnes in 1997. Its gold mining sector was deregulated in 2009.

Industry officials have attributed last year’s increase in production to an improved economic environment since the government adopted a multi-currency in January last year, leading to the reopening of several mines.

The operating environment last year greatly improved when compared to the previous year. Power supply was still a major concern but things had been better overall for the sector.

Meanwhile, gold mining companies in Zimbabwe have continued to increase exploration activities in anticipation of better earnings from improved commodity prices, especially that of gold. Two companies, Mwana Africa and African Consolidated Resources (ACR), last year released reports showing the extent of exploration activities.

Gold exploration in the Gadzema Belt, a few kilometres south of the Giant Mine, has discovered broad, near-surface gold mineralisation hosted by stock works, ACR said.

ACR also said that the economic pit modelling of the Giant Gold Mine has indicated that a conceptual pit at current gold prices will extend below the current drilling depth of 100-150m.

ACR’s exploration activities have been buoyed by the policy changes last year which have seen the liberalisation of marketing of gold with only a percentage being remitted to the Reserve Bank of Zimbabwe.

Exploration into the potential of other minerals has shown three areas containing probe-proven kimberlite indicator minerals.