Zimbabwe Shudders Its Gold Industry

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Precious Metals

Late last week a colleague of mine forwarded a story on Zimbabwe’s latest disaster, an imminent threat of several gold mine collapses. According to the article, “Metallon Gold, which produces 50% of the country’s gold has closed five mines — Redwing Mine, Shamva Gold Mine, How Mine, Acturus Mine and Mazowe Mine — due to failure by the bank to pay for gold deliveries from the entire sector.” The situation has become so dire that the mines are now selling their equipment and other assets in the hope of paying workers and meeting operational expenses.

It’s fitting that MetalMiner should cover two gold stories today both from failed nation-states (Venezuela being the other). For a country like Zimbabwe that relies on mining for 40% of its export earnings, it sure has a funny way of showing it. The article goes on to say that these mine shut-downs bring the total to 7 of 21 gold mines. The list of ironies to this story goes on and on. The country needs foreign currency. Gold is the chief mechanism for which it can earn foreign currency abroad. To effectively shudder this industry is like hammering the proverbial nail on the coffin. But the Reserve Bank has fallen behind on payments to the gold sector because it is busy paying for much needed items such as food and other basic life necessities. Cholera has also reared its head again.

Will anything ever change in Zimbabwe?

–Lisa Reisman

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