Gold News

Gold investment may increase as Zimbabwe mines teeter on brink

Mining experts suggested last week that the gold mining sector in Zimbabwe is on the verge of collapse.

Operations at most mines have been halted as a result of companies failing to receive money from the Reserve Bank of Zimbabwe and intermittent power supplies.

Furthermore, the Chamber of Mines has confirmed that deliveries in the seven months to August slumped by 44 per cent on a year-on-year basis to 2,624kg.

Collin Gura, chief executive of Metallon Gold - the country's largest gold producer - told the Sunday Mail: "We are currently facing serious problems at our mines because since the beginning of the year we have not been able to de-water them as the Zimbabwe Electricity Supply Authority (ZESA) keeps switching us off despite having paid in foreign currency. The mines have been flooded since the last rainy season.

"What makes it all the more difficult is that we have not been able to get our money from the central bank. As a result we have seen production fall from between 12,500 and 15,000 ounces per month to 1,000 ounces last month, and we will be lucky if we manage to get 500 ounces this month."

The situation appears to be critical but it could also provide a boost for anyone with a gold investment, as continued output problems may gradually force the gold price higher.


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