Africa-Press – Zimbabwe. THE gold sector in Zimbabwe is performing exceptionally well, but is that the best the country can do?
That, among several other observations, came out during the Gold Symposium held at the Chamber of Mines of Zimbabwe Annual Mining Conference, which ended yesterday in Victoria Falls.
The symposium was facilitated by Kuvimba Mining House.
According to CoMZ president Thomas Gono, the sector’s contribution to mineral exports has grown significantly from 27% in 2020 to 43% in 2024.
The sector, he posited, also contributes 57% of total formal employment in the mining industry with over 1,5 million people directly or indirectly involved in gold mining activities across the entire country.
“The gold mining industry continues to demonstrate impressive growth. Gold output increased from 32,4 tonnes in 2023 to 38,5 tonnes in 2024. Zimbabwe is, by all accounts, a gold mining country,” he said.
“Throughout our mining history, gold has been a cornerstone of sector growth. Today, its significance is further cemented by its use to our own local currents.
“The country is richly endowed with gold and geo-scientific data from the Geological Survey Department indicates that several areas remain underexplored.”
Guest speaker and Ghana Chamber of Mines immediate past president Joshua Murtoti said there was need to do more for Zimbabwe to achieve its goals.
Murtoti said Ghana, once the fourth largest gold producing country in Africa, had grown to be the largest on the continent after bypassing South Africa in 2018.
“We did not get it all correctly, we are still learning. However, there are some things that we have done that have unlocked the potential of our mining industry in Ghana and I do believe that Zimbabwe has the same footprints and you will be able to do the same,” he said.
“The mining industry is critical for both countries, both the Zimbabwe economy and that of Ghana. For Zimbabwe in 2024, the sector contributed 12% of your GDP [gross domestic product], in Ghana 8% of the GDP.
“I heard that the Zimbabwe government is targeting US$12 billion annually from the mining industry as a totality, Ghana in 2024 got US$11.6 billion from gold alone.”
He said Zimbabwe, with over 60 minerals, already has a footprint to overtake Ghana.
Murtoti, however, called for political stability.
“That is what attracts foreign direct investment to the sector. In the last couple of days I’ve been here, I have heard about perception, perception, perception,” he said.
“Perception, meaning that is not a reality, isn’t it? So it means there’s a lot of work that all of you here need to do to predict the reality of Zimbabwe to everyone so that foreign direct investment can come in.”
Murtoti identified the regulatory environment as a challenge for the mining sector.
“One of the key ones is the regulatory framework. We have similar, between Ghana and Zimbabwe, we have similar regulatory environment. If your regulatory environment is certain, it doesn’t mean that it has to follow a certain blueprint,” the Ghana Chamber of Mines immediate past president said.
“As long as the investor knows what to expect when it comes to Zimbabwe, they can make a decision on whether they want to come here or not. Whether they have the return on investment they desire.
“What investment does not like is changes in regulatory environment willy-nilly. And unfortunately, it does happen with our politicians. The regulatory environment keeps changing.”
He encouraged Zimbabwe to liberalise the sector.
“As a producer, I can contact any refiner anywhere in the world (and I can sell to that refiner. And in 48 hours, two business days, my money is in my hands.
“And I can do whatever retention into the country I need and whatever I need to keep out to buy input for the mine, it’s there for me to do.”
The Ghanaian gold producer said the 10 days retention from Fidelity Gold Refinery in Zimbabwe was not good enough.
“However, 48 hours, we must get our money, 48 hours, the Bank of Ghana pays you back for the gold they buy from you. So why? Because of that, we don’t mind at all selling to the Bank of Ghana.
“I am sure the large-scale people will not mind at all selling to Fidelity if they get their money back in 48 hours. It is possible to be done in two days. Ghana has done it,” he said.
Murtoti, however, applauded the Zimbabwean government for establishing Kuvimba Mining House (KMH).
“And that is a lesson I am going to take back and challenge our politicians in Ghana that if we truly want to see the benefit of our resources, we have to play in the ownership area,” he said, arguing that expropriating was not the way to go.
He said Zimbabwe was under explored in the gold mining sector.
“This country is endowed with a lot of minerals over 60. It’s also under explored. I think Ghana is probably facing a different situation. We are probably well explored,” Murtoti said.
“I would say too explored. It’s not a big country though, but a quarter of it is under some form of mining licence or lease, which tells me that Ghana is quite well explored, Zimbabwe could do better.
“So put more effort into that. Where you have taxes on exploration, in Ghana we have VAT [value-added tax] on exploration.”
He said Zimbabwe could also invest in technology to augment production.
“I encourage my brothers and sisters in that space to explore those and improve on your production.
“One of the things I heard while here was about unreliable power. The statistics I saw or read about Zimbabwe is that last year, in 2024, unstable power was estimated to cost the country US$500 million in revenue loss to this sector,” he said.
“Unstable power means you still have power of a sort. But undermining unstable power is not having power at all because you can’t use it. We call it dirty power.
“If there is so much that can be unlocked by looking at the power sector, I encourage you to do that. The infrastructure, I understand that the installed capacity for the country is 2 700 megawatts (MW).
“Tiny Ghana is reaching 5 000MW. I think you can improve on that. The sector alone, the mining sector, is projected to consume 800MW. That is significant from the 600MW that it has.”
Murtoti said Zimbabwe could overcome the challenge by encouraging independent power producers some of them doing on site production.
Meanwhile, Gono said the sector was confident that with increased investment in exploration, new deposits would be discovered, boosting gold output and elevating Zimbabwe’s global standing in gold production.
“The government is setting an ambitious target of producing 100 tonnes of gold annually. With the right policies in place, we believe this goal is achievable,” he said.
“These include, among many others, ensuring uninterrupted electricity supply and combative tariffs. Unlike base mineral exploration operations, most gold mines in Zimbabwe, particularly the small to medium enterprises, are not connected to dedicated power lines.
“Publicly available data shows that over 60% of the gold output comes from the artisanal and small-scale mining sector, which unfortunately continues to operate without reliable power.”
Gono called on for the reduction of operating costs.
“Should prices soften, as they inevitably do, the sector may face severe challenges, given the current structure of the gold industry, there is a need to develop a marketing framework that reflects the realities on the ground,” he said.
KMH chief executive Trevor Barnard said the mining conglomerate required US$950 million to fund its operations and bring them in full production capacity.
“We need to support the industry and government in doing that, so from our side, it’s critically important, but compliance across all the different aspects,” he said.
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