HARARE – Zimbabwe's mineral earnings in the first quarter declined seven percent to $416 million from $452 million prior comparable period, a situation analysts say is expected to worsen the country’s liquidity situation.
The country is presently reeling from a biting cash crisis that has seen the central bank impose withdrawal limits to help liquefy the country’s foreign accounts.
However, latest data from the Zimbabwe Chamber of Mines reveals that a decline in one of the country’s major export earners will put further strain on the already cash-strapped system.
In the period under review, gold, nickel and platinum were major contributors as gold output rose to 5 104 kilogrammes (kg) in the quarter at a value of $191,5 million.
Platinum earned $198,9 million after 4,3 tonnes were produced in the first quarter with nickel production improving from 4,4 tonnes to 4,8 tonnes valued at $30,9 million.
While the current figures do not account for chrome and diamond statistics, experts say the revenue slump is a direct result of declining international commodity prices.
The latest development also comes as the World Economic Forum (Wef) has warned that Zimbabwean mining companies must brace for a further plummet in commodity prices on the international market this year.
Despite having had a tough year in 2015, commodity prices for everything, from crude oil to industrial metals such as iron ore and copper have been plummeting.
The economic watchdog said countries like Zimbabwe which primarily depend on metal export earnings had to revise this year’s growth predictions, and issue conservative estimates.
Due to this situation, the world’s mining giants have been forced to restructure their businesses in order to stay afloat as they battle declining profits.
The gloomy figures come as Finance minister Patrick Chinamasa in his 2016 National Budget said Zimbabwe’s mining output was expected to grow by 2,4 percent in 2016 buoyed by increased output in gold, chrome, coal, nickel, platinum and diamonds.
According to Wef, the free-fall is being caused by a combination of oversupply and weak demand that have wreaked havoc on the natural resources industry.