Zimbabwe gold output declines 15% amid electricity, forex shortages
- Zimbabwe's gold production declined by 15% in 2023 due to challenges like electricity cuts and currency volatility.
- The country's 2023 gold production of 30.11 tons fell short of the government's target of 40 tons for the year.
- Gold producers in Zimbabwe receive 75% of their earnings in U.S. dollars and face the impact of the significant devaluation of the local currency. Power supply challenges also affected production.
Official data revealed that Zimbabwe produced 30 metric tons of gold in 2023, reflecting a 15% decline compared to the previous year. The decrease in output was attributed to challenges such as electricity cuts and currency volatility that impacted the mining sector.
The 2023 gold production of 30.11 tons fell short of the government's target of 40 tons for the year. The data comes from Fidelity Refineries, a state-owned agency responsible for processing all the gold produced in Zimbabwe.
Gold producers in Zimbabwe, like other exporters, receive 75% of their earnings in U.S. dollars and the remaining balance in the local currency, which experienced a significant devaluation of over 80% in the past year alone. The country also faced challenges in power supply, with frequent breakdowns in aging coal-fired plants and reduced generation at the Kariba hydropower station due to low water levels.
Zimbabwe, once a leading gold producer in Africa, has fallen behind regional counterparts such as Ghana, Mali, Burkina Faso, Guinea, and Tanzania due to an extended economic crisis that deterred investors. The country, which remains largely under-explored, faces challenges as operating mines struggle to raise capital. Concerns over government policies and property rights, particularly in the aftermath of the seizure of white-owned farms in the early 2000s, have impacted investor confidence. During the peak of Zimbabwe's political and hyperinflation crisis in 2008, gold output plummeted to a mere 3 tons. While production has recovered in recent years, reaching an all-time high of 35 tons in 2022, the country still trails behind its regional peers, despite its considerable potential. The challenges in the mining sector highlight the importance of addressing policy issues and restoring confidence to attract investment and unlock Zimbabwe's untapped mining potential.