Business Reporter
HARARE – Zimbabwe’s gold sector is facing significant challenges, with the country reporting a $US270 million loss in gold earnings for the year-to-date period from January to October 2024.
With 28.2 tonnes of gold produced, the nation’s total gold revenues reached US$1.87 billion, falling short of the potential US$2.3 billion based on an average gold price of US$2,364 per ounce.
The data from Fidelity indicates that while Zimbabwe’s revenues for the first ten months of 2024 have already surpassed the entire year’s revenue of US$1.80 billion for 2023, the actual earnings still reflect a troubling shortfall.
“With the production figures we’ve seen, we expected to earn around US$2.14 billion,” a spokesperson from the gold sector remarked.
“The reality of our earnings highlights a need for urgent reform in our export strategy.”
The country does not sell gold directly to the London Bullion Market (LBMA), relying instead on intermediaries for transactions. This reliance results in reduced earnings and higher costs, leading to a 12.6% loss on each tonne exported.
“The use of intermediaries is significantly impacting our profitability,” the spokesperson added.
“We must explore more direct avenues for selling our gold to maximize revenue.”
This loss is not an isolated incident; in the fiscal year 2023, Zimbabwe earned $1.8 billion, again falling short of a potential $2 billion based on spot prices, indicating a loss of $200 million.
Zimbabwe’s difficulties can be traced back to its suspension from the LBMA in 2008, following a drastic decline in gold production to just 3 tonnes, well below the minimum annual requirement of 10 tonnes for membership.
As the country grapples with these challenges, industry experts are calling for a comprehensive review of Zimbabwe’s gold export strategy to enhance revenue generation and strengthen the sector’s resilience.
Zim GBC News©2024