Martin Kadzere Senior Business Reporter
GOLD production for two months to February this year rose 16 percent to 2,52 tonnes from 2,1 tonnes in the same period last year, latest statistics from the Chamber of Mines show.
The value of the mineral also increased to $99,3 million from $86,7 million a year earlier.
Platinum production was flat at 2 692 ounces while the value declined to $71,1 million from $83,8 million in the corresponding period last year. According to media reports, citing the World Investment Platinum Council, the platinum market was expected to be in deficit of 235 000 ounces this year, on stronger mining and recycling supply growth.
Above-ground stocks of the metal that have prevented prices from benefiting from a tight market are forecast to have declined 20 percent in 2014 and are expected to drop a further 8 percent this year.
Platinum prices fell 12 percent last year and are now at their lowest since 2009 around $1,168.
Coal production increased to 1,05 million tonnes from 1,03 million tonnes in the same period last year with value increasing to $18 million from $15,1 million, said Chamber of Mines. The chamber said it had not yet received data from other mineral producers.
Copper production was 1 409 tonnes valued at $6,1 million, palladium was 1 627kg at $36,1 million.
The major cause of fall in mineral prices especially in platinum, iron ore and gold has been mainly as a result of two forces that is, ramped up production by major global producers from Africa and Australia and depressed global demand.
In China, the world’s second largest economy for example, slowing industrial trends and deteriorating property fundamentals are having an adverse impact on bulk commodity demand – prices of iron ore and thermal coal. Both commodities have hit five-year lows.
Mines and Mining Development Deputy Minister Fred Moyo said recently Zimbabwe’s miners were facing “a very difficult” situation as the slump in commodity prices coupled with huge overheads was preventing them from realising meaningful margins.
He said most mining firms, particularly gold producers were selling commodities at prices almost at par or even lower than total production cost, making them increasingly uncompetitive.
“While we limped on when there was a prices boom, it is going to be very difficult (with the current prices),” said Deputy Minister Moyo.
“With high overheads and low prices, the situation is quite difficult. I hope a lot of them will be able to align costs just to stay above water; to break
even and hang in for a while . . . we will be very happy.”
Under the current situation, the deputy minister pointed out key issues that need to be immediately addressed to ensure survival of the local miners. These include addressing costs of utilities, particularly rail and power, re-aligning taxation and cost of labour.
The mining sector continues to make a significant contribution to the country’s export earnings, accounting for 52 percent and is expected to grow 3,1 percent this year.