ZiG faces new threat as gold deliveries down 5% in...

ZiG faces new threat as gold deliveries down 5% in May

Nyashadzashe Ndoro

CHIEF REPORTER

Zimbabwe’s gold deliveries for May, according to Fidelity Gold Refinery, stood at 2 734kg, a 5% decrease from the 2 876kg delivered in May last year.

However, this represents a 15% increase from the 2 387kg delivered in April this year. Large-scale miners delivered 1 056kg of gold, a 1% decrease from the 1 070kg delivered in May last year and a 9.6% decrease from the 1 168kg delivered in April this year.

Artisanal and Small Scale Miners, who account for the bulk of gold deliveries, sold 1 678kg in May, a 7% decrease from the 1 806kg delivered in May last year but a 38% increase from the 1 218kg delivered in April. Despite the firming gold prices globally, miners in Zimbabwe are facing rising production costs, which may impact the country’s gold output.

The southern African country expects to produce 40 tonnes of gold this year, up from the 30 tonnes produced in 2023. The increase in gold production is expected to boost Zimbabwe’s foreign exchange earnings, as gold is one of the country’s major export commodities.

Reduced gold output may impact the amount of gold available to back Zimbabwe’s new currency, Zimbabwe Gold, potentially weakening its value.

Gold production decreases, which is also due to higher production costs, also leading to the decrease in Zimbabwe’s foreign exchange earnings. This could impact the country’s ability to import essential goods and services, potentially affecting the value of the currency, which is also backed by the foreign currency.