[miningmx.com] – ZIMBABWE’S Chamber of Mines has warned that gold producers could close owing to high electricity tariffs, mining levies, rising wages, and regulatory uncertainty regarding the government’s approach to unused mineral claims.
The southern African country is angling for a return to the London Bullion Market and has issued a directive that all its gold producers sell the precious metal through Fidelity Printers, a unit of the central bank.
Some of the gold producers affected by the regulatory change are Metallon Gold, Falgold, Caledonia Mining Corporation, and Mwana Africa’s Freda Rebecca gold mine.
In response, a report presented to parliamentarians by the parliamentary portfolio committee on mines and energy on Tuesday said gold producers in the country want the government to “maintain consistency in the implementation of its policies’.
The report argued that regulatory certainty is “one of the fundamental factors in attracting investment’ into the sector.
The committee has also recommended that the government “urgently’ formulate and implement a “use it, or lose it’ policy on unused mineral claims in the gold sector. The committee also said the government should set-up an independent commission “to audit mines holding on to claims for speculative purposes’.
Gold producers in Zimbabwe want the government to “consolidate and rationalise the taxes, levies and fees which were regulated by the different government agencies’. The chamber is seeking a further reduction of the gold levy to 3% from 5% as gold prices have remained depressed. Until October, the gold royalty was 7%.
“The Chamber of Mines informed the committee that the major challenges faced by gold producers included: lack of financial resources to re-capitalise existing operations; high production costs especially on labour and power; instability of gold prices on the world market; inconsistent policies as well as numerous taxes and levies that have to be paid to different government agencies,’ said the report.
The chamber of mines also advised the committee that as a result of these constraints, “… some gold mines were set either to scale down operations or close down’ as some of them are owed $50m by the Reserve Bank of Zimbabwe (RBZ).
The report said that Metallon Gold, the biggest gold producer in Zimbabwe, was owned $25m by the central bank, which had not given a time-frame for the settlement of the debt. This and other constraints being faced by the Zimbabwe miners was eroding confidence in the ability of the central bank to pay for gold deliveries.
“The committee observed that producers of gold lacked confidence in Fidelity Printers and Refiners being the sole buyer of gold in the country, given that several gold producers were owed millions of dollars by the Central Bank,’ the report said.
