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Huge investments into Zimbabwe’s large-scale gold mines have bolstered output in several key operators that have pushed production beyond initial projections, Mines minister Winston Chitando said this week.
Investments into key operations like the Zimbabwe Stock Exchange (ZSE)-listed conglomerate Padenga Holdings’ Eureka and Pickstone gold mines in Mashonaland Central are seen to be driving the industry in 2021, according to Chitando.
He said there had been significant injections to lift capacity at firms like RioZim, which have placed Zimbabwe on track to create a US$1 billion gold mining sector by 2023.
The deals were part of a broad mining industry strategy rolled out in 2019 to expand output by more than 200% to US$12 billion within the next two years.
These targets have, however, been placed into jeopardy by continuing fragilities in the past year.
In an interview hosted by the Zimbabwe Independent on Alpha Media Holdings (AMH)’s Heart & Soul Television, Chitando said the outlook for gold mining was bullish after a sudden rise in interest to ramp out output in large-scale miners.
Big miners had trailed production from Zimbabwe’s 500 000-strong artisanal miners.
“There is huge interest in capacity for large-scale miners,” Chitando said.
“Traditionally, we have heard the biggest gold miners producing three tonnes per annum, but now we have a number of big projects coming. Shamva Mine will be producing four tonnes per annum. It will be up and running by 2023.
“Eureka will be producing from zero to 1,6 tonnes per annum. It is now up and running after being commissioned by the President (Emmerson Mnangagwa) last month. We have Caledonia where they will be doing two tonnes per annum.
“We also have RioZim, which will be doing plus or minus 1,5 tonnes per annum. So, this is on the large-scale miners. “On the artisanal sector gold production is actually going up through initiatives, which the President will unveil soon to support the increase in the small-scale miners.”
Chitando said output for May and June this year, had improved significantly, placing Zimbabwe on track to achieve its production targets.
Padenga has been one of the biggest investors into gold mining in 2020. Early this year, the firm said it benefited from its decision to diversify from a crocodile skin processor into the resources sector.
The firm acquired 50,1% shareholding in Dallaglio, which owns Pickstone in Chegutu. It also pounced on Eureka Mine near Guruve, which was recently commissioned by Mnangagwa.
“The group’s financial result for 2020 was driven by a solid contribution to revenue from Dallaglio with the mining business consolidated effective 1 January 2020,” Padenga said in a commentary to its financial statements. Revenue for the group was US$71,3 million up from US$29,1 million in the prior period.”
Revenue from the mining business amounted to US$40,3 million and constituted 57% of total revenue.
Earnings from the Zimbabwean crocodile operation grew by 6% from US$25,5 million to US$27 million (38 % of total revenue).
With mining now driving the business, the company said Eureka, which had been mothballed years back, was expected to improve revenues.
“Delta Gold (Pvt) Limited mine refurbishment project accelerated during the period and was more than 50% complete by year end and remaining on track for commissioning in July 2021,” Padenga said.
“The subsequent ramp up to the full processing capacity of 100 000 tonnes per month is targeted by end of December 2021. At the end of February 2021 US$37 million had been invested out of a total projected investment cost of US$51 million to recommission the mine.
“There is good potential to extend the Eureka life of mine by moving to an underground mining method once the open pit has been exhausted.”
The international gold spot prices are expected to remain strong this year, and gold miners are anticipated to ride on the bullish prices to expand operations, as firms continue to yield positive returns.
In the past year, a total of 362 500 tonnes were milled at the Pickstone mine processing plant at an average of 2,28 g per tonne and an average recovery of 82%.
The operation produced 722 kgs of gold, being an increase of 14% over the prior period. Zimbabwe Independent
