Business Reporter
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HARARE \u2013 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.<\/p>\n\n\n\n
With 28.2 tonnes of gold produced, the nation\u2019s 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.<\/p>\n\n\n\n
The data from Fidelity indicates that while Zimbabwe’s revenues for the first ten months of 2024 have already surpassed the entire year\u2019s revenue of US$1.80 billion for 2023, the actual earnings still reflect a troubling shortfall.<\/p>\n\n\n\n
“With the production figures we’ve seen, we expected to earn around US$2.14 billion,” a spokesperson from the gold sector remarked.<\/p>\n\n\n\n
“The reality of our earnings highlights a need for urgent reform in our export strategy.”<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
“The use of intermediaries is significantly impacting our profitability,” the spokesperson added.<\/p>\n\n\n\n
“We must explore more direct avenues for selling our gold to maximize revenue.”<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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