Zimbabwe Mining Sector Hit By Falling Metal Prices

Posted by: : Paul EbelingPosted on: January 22, 2015 Zimbabwe Mining Sector Hit By Falling Metal Prices
 

Zimbabwe Mining Sector Hit By Falling Metal Prices

Decreased metal prices have hit hard Zimbabwe’s mining sector which is expected to see negative growth for the first time in 5 yrs, a mining group said.

The Chamber of Mines of Zimbabwe said the sector would see negative growth rate of around -2% in Y 2014 due to challenges including falling metal prices, lower capital and FDI (foreign direct investment) inflows, high production costs, unstable power supplies and inactive exploration activities.

The Chamber said the Gold industry continued to face viability challenges while production of minerals such as platinum, diamond, chrome and palladium was expected to decline in Y 2014.

The Gold sector is the biggest foreign currency earner in Zimbabwe’s metal mining sector.

The mining group complained of high royalties charges, which it said are the highest in Africa.

Declining from 1,671 to 1,140 oz between January and December last year, the Gold prices are projected to remain depressed, ranging between 1, 000 and  1,300 in Y 2015.

Though the government reduced Gold royalties from 7 to 5% last year, the continued decline in Gold prices had eroded profits, the mining group said.

The group urged the government to further reduce power tariffs, royalties, and charges by Fidelity Printers and Refiners, a unit of the Reserve Bank of Zimbabwe.

Stay tuned…

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Paul Ebeling

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

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