Maravi

(NEWZIMBABWE) Royalties may shut 75pc of gold mining ector
16/01/2014 00:00:00
by The Source

IAN Saunders, chairman of the Zimbabwe Chamber of Mines committee on gold producers, said this week the government should review royalties on gold and speedily address other policy issues to avert a looming crisis. The risk was that most of the gold mines in the country may be forced to close down owing to viability constraints, he said.

The Chamber of Mines of Zimbabwe told parliamentarians on Tuesday that the government's increased tapping of the industry to boost state coffers could choke the gold miners' bottom lines and deter investors from sinking money into new projects.

A new report on the economy released on Wednesday by Econometer Global Capital said growth in Zimbabwe’s mining sector is likely to be stunted this year.

"A ban on export of unrefined gold was effected and it is obvious the consequences might be distasteful," Econometer said in its report.

Saunders, who is also CEO of New Dawn Mining, said: “There are serious viability issues in the gold industry and our assessment is that, within 90 days, 75% of the gold mines in this county will be shut unless there are policy changes."

He added that "royalties are too high,” saying the mining fees were just one of many constraints companies operating in Zimbabwe are generally facing. Producers of the precious yellow metal pay 7% in royalties for mining gold in the country.

The World Bank’s country economist for Zimbabwe told an economic symposium in Harare on Wednesday that Zimbabwe’s increased attention on the mining sector to boost its coffers would be affected by softer metals prices.

This is set to hit economic growth prospects for the current year.

"Amidst uncertainty around mineral prices and recovery in the agricultural sector, the baseline projections forecast economic growth at 4.2% in 2014," she said.

Zimbabwe is expected to have produced about 14 tonnes of gold in 2013 but there are fresh concerns that the 15 tonne projection for this year will not be attained.

The government is also putting pressure on producers of gold, diamonds and platinum to contribute royalties to a Sovereign Wealth Fund the country is setting up to abet continued decline in the economy.

Gold mines in Zimbabwe include those run by New Dawn Mining, Caledonia Mining Corporation, RioZim and Metallon Gold. Mwana Africa and Falcon Gold are also significant producers of the precious metal.

Apart from gold, Zimbabwe also has vast reserves of platinum, nickel, chrome, diamonds and coal but investors are skeptical to sink money into new projects while exploratory projects have been put on the back-burner.

Labels: FRAUD, GOLD, IAN SAUNDERS

posted by MrK @ 5:29 PM