HARARE – Zimbabwe hopes to ramp up gold production to 50 tonnes and rake in $1,8 billion in revenue by 2020, as the country moves closer to being re-admitted into the London Bullion Market Association (LBMA).
The country, which was disqualified from LBMA in 2008 due to successive declines in gold production, could be readmitted into the prestigious bullion market as early as July this year after registering over 13 tonnes annually in the past four years.
The LBMA, whose minimum volume threshold in 10 tonnes, is a wholesale market for the trading of gold and silver, it also regulates gold trade internationally with trading among members loosely overseen by the Bank of England.
Meanwhile, Gold Producers Association (GPA) chairman Noah Matimba last week told delegates at the Chamber of Mines annual conference that the presence of extensive gold deposits coupled with idle capacity presented an opportunity for the gold sector to increase output to over 50 tonnes by 2020.
“The gold industry requires $600 million in the next five years to optimise production, of which 410 million relates to ramp up capital, while 190 million is for sustenance of operations.
“Existing producers have potential to increase output to 50 tonnes through improved efficiencies and expansion of current operations and in line with output growth, gold revenues will reach $1,8 billion by 2020,” Matimba said.
Zimbabwe’s gold receipts increased from $155 million in 2009, to reach a peak of $868 million in 2013 and with $737 million recorded in receipts last year. For the period 2012– 2015, the industry generated $2,7 billion, according to Matimba.
“The sharp increase in revenues is attributable to the commodity super-cycle where gold price accelerated to exceed $1 600/ ounce. The knock on commodity prices in 2013 also explains the fall in gold revenues,” the GPA chief said.
Gold is presently contributing around four percent to the fiscus through government taxes and other fiscal charges with an additional four percent being generated in the value chain.