Zimbabwe mineral revenue soars 9 percent in first half of 2016

Zimbabwe earned 806 million U.S. dollars from mineral exports in the first half of the year, an 8.8 percent increase from the same period last year, the Chamber of Mines said on Thursday.

The umbrella body for major mining firms in the country attributed the increase to improved output in most minerals despite subdued international mineral prices, the state-run news agency reported.

The Chamber said that with the exception of gold, average prices for all key minerals were lower compared with the same period last year.

The average price for gold under the period was 1,219 U.S. dollars per ounce compared to 1,206 dollars per ounce during the same period last year while platinum prices at 958 dollars per ounce were 18 percent lower than 1,161 per ounce during the same period last year.

“Albeit lower than desired, key minerals such as gold, platinum and nickel recorded significant output growth in the first half of 2016, compared to the same period in 2015,” said Toindepi Muganyi, the president of the Chamber of Mines.

Production of gold, Zimbabwe’s largest mineral export earner, reached 10,360 kg, a 17 percent increase from last year while platinum output at 7,968 kg was 43 percent up from the same period last year.

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Muganyi said the mining sector required about 3.8 billion dollars to optimize production in the next five years and also urged the creation of a favorable investment climate to facilitate mobilization of the required capital.

The operating environment was being hamstrung by a tight fiscal framework characterized by multiple taxes, high royalties and un-affordable fiscal charges, he said.

Muganyi said the current electricity tariff for gold was unsustainably high and compromising the viability of the gold sector.

“The tariff should be rationalized in line with regional and local average tariffs,” he said.

Commenting on the performance of the mining sector, Finance Minister Patrick Chinamasa said he was encouraged by the level of production but highlighted that government expected more output from the sector.

Mines and Mining Development Minister Walter Chidhakwa pledged more government support to the mining sector for it to play its role in economic recovery.

Mining is Zimbabwe’s second largest foreign currency earner after agriculture.