Mineral revenue reaches $1billion in seven months

Mineral revenue reaches $1billion in seven months
Minister of Mines, and Mining Development, Walter Chidhakwa

Minister of Mines, and Mining Development, Walter Chidhakwa

HARARE — Mineral revenue reached $1 billion in the seven months to July 2017, with gold contributing half of the total sales. In the half-year to June 2016, mineral revenue was at $806 million, driven by an increase in gold and platinum production which earned three quarters of total revenue.

Government is targeting $3 billion in mineral revenues by year-end, but some economists have argued that the target is unlikely to be achieved due to depressed international demand and less-than-favourable international prices. In a Treasury update for the first quarter of 2017, Finance and Economic Development Minister, Patrick Chinamasa, said he was optimistic that the target of $3 billion was achievable, citing an expected rise in “most international mineral prices”.

Available data from the mining sector shows that during the seven-month period, gold dominated, with 13 000 tonnes valued at $516 million. Improvement in gold output has been attributed to the incentives introduced by the Reserve Bank of Zimbabwe last year. Government this year revised downwards the gold production target from 28 tonnes to 24,5 tonnes due to loss of production in January and February largely as a result of heavy rains that flooded most mines.

Platinum output was at 8 464 kgs valued at $237 million. During the second quarter of 2017, platinum production fell 13 percent to 105 000 ounces year-on-year, but dropped nine percent compared to the previous quarter. However platinum production in Zimbabwe has been dropping significantly, with the World Platinum Investment Council (WPIC) having projected a nine percent drop for the full year to 445 000oz.

Chrome ore output was at 232 367kgs valued $430 million, while high carbonated ferrochrome output stood at 150 500kgs valued at $166 million during the period. While a rebound in chrome prices, which had been subdued over the years, is expected to play a big part in driving export earnings, the Mineral Marketing Company of Zimbabwe is aiming to double exports this year from 285 000 metric tonnes in 2016 to 550 000 metric tonnes on the back of the Chinese market, which has been the country’s preferred chrome destination. Prices of base metals have however remained subdued, slowing down export earnings.

Nickel revenue for the seven months stood at $74,6 million after 10 000 kgs was produced during the period. Some 7 000 kgs of palladium produced during the period brought in $161 million, while 774 kgs of rhodium fetched $19 million. Coal output was at 605 000 kgs valued at $12 million during the period. Last year, the country earned about $1,9 billion from mineral exports. newsdesk@fingaz.co.zw

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