Zimbabwean Gold Output to Rise 35%

China Business News

Zimbabwe's gold output is expected to rise by up to 35% this year but funding, 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 tons in the next five years.

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

Production last year was 9.6 tons.

Gold production plunged to a record low of 3 tons 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.