Zimbabwe sees 2011 gold output up 35 pct: chamber

Reuters    Translate This Article
27 May 2011

VICTORIA FALLS, Zimbabwe (Reuters) - Zimbabwe's gold output is expected to rise by up to 35 percent this year but funding and power shortages and high costs will continue to stifle growth in the sector, a chamber official said on Friday.

Victor Gapare, president of Zimbabwe's Chamber of Mines said the gold sector would need $1 billion a year to increase production to 50 tonnes in the next five years.

'The 2011 production is expected at between 12 to 15 tonnes, an increase of 35 percent. As our short to medium term target, we believe gold production should be at 20 tonnes a year,' Gapare said at the chamber's annual meeting.

Production last year was 9.6 tonnes.

Gold production plunged to a record low of 3 tonnes in 2008, as mines choked from hyperinflation and acute foreign currency and electricity shortages.

A power-sharing government since set up by bitter rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai dumped a worthless local currency for multiple foreign currencies, taming hyperinflation and stabilising the economy.

Most mothballed mines have since come back into production as companies are keen to benefit from the bullish outlook for gold, which has been hitting record highs this year.

'We expect the firm prices of gold to remain. With this positive outlook for gold, it is high time we put in place policies that will allow us to ride the crest of this positive trend,' Gapare said.

Spot gold stood at $1,526.00 an ounce by 1000 GMT.

Companies in Zimbabwe's gold sector include Mwana Africa, privately-held Duration Gold, Canada's New Dawn Mining Corp and RioZim.

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