Zimbabwe has extended the incentive for its biggest gold miners to beat state-set output targets.
Large producers that exceed their goals will receive 80% of the payment for the additional output in foreign currency, Zimbabwe's deputy mines minister Polite Kambamura has said in an interview. That compares with the existing 60-40 split between foreign and local currency payments for gold produced there.
“Overall, it’s a good policy,” said Isaac Kwesu, CEO of the Chamber of Mines. “But those already operating at full throttle will not be able to benefit from it.”
Zimbabwe’s gold miners say they can make the investments required to help reboot the country’s economy only if they can retain a larger share of their foreign currency earnings. Gold exports are the No 3 foreign currency earner, after platinum and remittances, in a nation that suffers from an acute shortage of dollars.
Kambamura said the government has identified two local lenders that could help provide the $1bn of funding needed by the gold industry over the next five years.
Kuvimba Mining House Ltd, 65% owned by the state, plans a fivefold increase in production at its Shamva Gold operation by next year, the deputy minister said.
“Shamva is coming up with a huge expansion project which will see them doing opencast mining,” he said. Mothballed state-owned gold mines will be reopened, while those not fully operational will be recapitalised, Kambamura said.
Gold output in Zimbabwe climbed 47% in the first seven months of this year. The government wants the gold sector to account for a third of the targeted $12bn the mining industry will generate next year, the deputy minister said.
More stories like this are available on bloomberg.com
Zimbabwe offers target-beating incentive for biggest gold miners
Image: Bloomberg
Zimbabwe has extended the incentive for its biggest gold miners to beat state-set output targets.
Large producers that exceed their goals will receive 80% of the payment for the additional output in foreign currency, Zimbabwe's deputy mines minister Polite Kambamura has said in an interview. That compares with the existing 60-40 split between foreign and local currency payments for gold produced there.
“Overall, it’s a good policy,” said Isaac Kwesu, CEO of the Chamber of Mines. “But those already operating at full throttle will not be able to benefit from it.”
Zimbabwe’s gold miners say they can make the investments required to help reboot the country’s economy only if they can retain a larger share of their foreign currency earnings. Gold exports are the No 3 foreign currency earner, after platinum and remittances, in a nation that suffers from an acute shortage of dollars.
Kambamura said the government has identified two local lenders that could help provide the $1bn of funding needed by the gold industry over the next five years.
Kuvimba Mining House Ltd, 65% owned by the state, plans a fivefold increase in production at its Shamva Gold operation by next year, the deputy minister said.
“Shamva is coming up with a huge expansion project which will see them doing opencast mining,” he said. Mothballed state-owned gold mines will be reopened, while those not fully operational will be recapitalised, Kambamura said.
Gold output in Zimbabwe climbed 47% in the first seven months of this year. The government wants the gold sector to account for a third of the targeted $12bn the mining industry will generate next year, the deputy minister said.
More stories like this are available on bloomberg.com
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