Zimbabwe’s gold deliveries dropped 16,8 percent in 2019 due to a number of reasons including smuggling of the mineral and subdued performance by big producers.
Preliminary figures from Fidelity Printers and Refiners — the country’s sole buyer of gold and silver, show that deliveries declined to 27,6 tonnes from 33,2 tonnes a year earlier, earning the country US$1,3 billion.
Final statistics will be released on January 20.
Once again, small scale miners produced the bulk of the metal, accounting for about 63 percent of output or 17,4 tonnes against big producers, which delivered 10,1 tonnes.
Zimbabwe earn much of its foreign currency from mining, with gold being one of the major contributors, but the sector is facing a myriad of challenges including power cuts, which have seen large scale producers struggling.
The prevailing foreign currency shortages have also hobbled imports of spare parts and consumables.
On the hand, a significant amount of gold is being sold through informal channels to illegal buyers who then smuggle the mineral outside the country. Authorities estimates between 30 tonnes and 35 tonnes of gold are being smuggled annually.
“The leakages are rampant and we believe it is to do with (foreign currency) retention levels,” Onisemo Moyo, Mines and Mining Development Permanent Secretary said.
“We also have mines that are not operating well and all these resulted in the decline in deliveries.”
Gold miners are allowed to retain 55 percent of their foreign currency earnings, but there has been a push for 100 percent forex retention.
While the RBZ admitted the review of the threshold was inevitable, the 100 percent being sought by miners was unrealistic as the central bank also needed money for critical imports.
The mining sector remains one of the key industries expected to anchor the revival of an economy suffering from depressed productivity and foreign currency shortages among others.
Last year, Zimbabwe unveiled a strategic roadmap to propel the country’s mining sector to US$12 billion industry by 2023. Under the US$12 billion mining roadmap, gold is expected to contribute US$4 billion.