Let’s continue beating the golden path

Gold has been Zimbabwe’s leading export for centuries, right back into pre-colonial times, through the Portuguese attempts at colonisation in the 17th Century, through British colonial attempts in the 20th Century and into Independence in 1980.

Other commodities have boosted exports, from ivory in pre-colonial times to tobacco, platinum, diamonds cotton and base metals today, but gold has always been on the list, year-after-year, decade-after-decade, and even century-after-century.

And last year we set a new output record, 33,3 tonnes, or a little over 1 000 000 troy ounces, the measure for pricing. That 2018 output was worth around $1,4 billion, perhaps a little more if the Reserve Bank of Zimbabwe was particularly astute on what day it sold, and that in turn supported a lot of our essential imports. Without gold Zimbabwe would be sunk.

Fortunately there is still a lot left. This year the target is 40 tonnes, which could well bring in $1,7 billion and by 2023 we hope to hit 100 tonnes, worth at today’s prices more than $4 billion, which should do a great deal to fix our unfavourable balance of payments.

In fact gold, as it has done so often in the past, could well save the Zimbabwean economy and for certain it must be a major component in the efforts to transform Zimbabwe into a middle-income economy by 2030.

But gold is not just a major foreign currency earner helping us balance our trading books. Thanks to the geology it is also a way of spreading wealth. There are no great huge deposits of gold in Zimbabwe. There is no Witwatersrand or Klondike. That was a great disappointment to both the Portuguese and English colonialists. They saw the steady flow of gold out of the country and moved in, only to find that giant mining operations using slave or semi-slave labour were never going to work.

Gold ores are scattered in Zimbabwe, a bit almost everywhere, but hardly any large lumps. And so it has been the panners and the small-scale miners who have extracted this wealth, and who still dominate the industry, producing roughly two thirds of the output. And that in turn means that, unlike most mining, the wealth is very widely spread, tens of thousands of people earning modest amounts rather than a few very rich men and a sea of poorly-paid workers. So there is a double benefit.

The Government is now determined to press ahead with the double benefit. Big miners are welcome, very welcome, as in all mining operations. We need and desire their investment and there is need to assist with the legal and administrative framework they require.

The same problem that has occurred in other mining sectors, of large claims left unexploited, is being worked on in the same way. The miners can keep the claims needed for the life of a mine, but cannot keep what they are never going to use. Those claims must be released so that others, ready and able to mine, can get stuck in.

The Government has, in other ways, recognised that the geology requires a large army of self-employed artisanal miners to complement the more conventional investment-led mining operations. And that in turn requires more Government assistance from advice through provision of equipment and even administrative and legal systems that help the small-scale miners.

Indeed more suitable equipment has been sourced as a result of President Mnangagwa’s recent trip to Eurasia.

In many ways gold mining economically is more like agriculture than most other mining operations. In farming we have a few big plantations, who can look after themselves given an investment-friendly environment, and a lot of small-scale farmers who need services equipment and even contracts so they have access to the resources required to farm profitably. But a few hundred thousand family farms feed the nation when the output is combined.

And in gold it is much the same. A smallish group of major miners bringing in a third of the output and tens of thousands of artisanal miners bringing in the rest. But add all those ounces and even kilogrammes together and we have 33,3 tonnes, plus a lot of our essential imports.

The growing output shows that we have the right policy and programmes in place, although no doubt they can be improved. What we now need is continue that route and make gold mining even more viable and possible.

Source : The Herald

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