Mugabe threats hamper Zimbabwe gold production

Gold production in Zimbabwe has fallen dramatically amid threats by president Robert Mugabe to nationalise mines, ZW News reports.

The precious metal is one of the nation's chief industries but producers are currently operating below 20 per cent of capacity, as they struggle with problems such as power outages.

Mr Mugabe has threatened to seize gold mines, accusing producers of smuggling the yellow metal out of the country and hiding foreign currency earnings.

The country's chamber of mines said: "Most gold producers are operating below 20 per cent capacity with some having suspended operations completely."

It expects gold output to fall by almost a quarter (23 per cent) this year to 8,700 kilograms, down from 11,354 kilograms in 2006.

The Zimbabwe government is also failing to pay out millions of dollars that are owed to gold mining firms, which is adding to the pressure.