Gold News

Zimbabwe gold production slides by almost a half

The Chamber of Mines has confirmed that gold production in Zimbabwe declined by 49 percent in 2008 as a result of the country's difficult economic circumstances.

Official figures from the body show that output last year was 3,576 kg, in comparison to the figure of 7,017 kg reported in 2007.

David Murangari, president of the Chamber of Mines, explained that restrictive operating environments and a desperate lack of working capital contributed to the decline.

"The performance of the Zimbabwean mining industry in 2008 is best described as dismal and gloomy," he said at the organisation's annual general meeting.

"Most mines operated under extremely difficult macro-economic conditions for the first nine months of the year. Most importantly, there is dire need for recapitalisation of the industry."

However, such falls in gold output are likely to be welcomed by anyone with a Gold Investment, as decreasing global supplies leads to higher demand and therefore higher Gold Prices.

Last week, Andrey Kryuchenkov, an analyst with London-based firm VTB Capital, also sounded a positive note for gold by explaining that dollar weakness and inflation fears should keep prices moving upwards.

"Most of the ongoing rally in the precious metal is more driven by a stark weakness in the US dollar than the risk averse buying we saw last winter," he said in an interview with Bloomberg.

"Inflation concerns are gradually creeping onto the investor agenda."

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