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Decline in Mining Income Spooks Zimbabwe Economy

The first quarter of 2014 witnessed some decline with mining income falling by 15.4 percent compared to the same period last year. (File Photo)
An independent Zimbabwean chartered accountants firm says overall mining income fell by $67 million in the first quarter of 2014 due to volatile prices of minerals worldwide and the country’s feared controversial black economic empowerment programme.

According to H. and E. Bloch and Company, the 15.4 percent decline in mining income this year compared to the same period last year, is worrying as the nation’s mineral resources have almost become the mainstay of the economy.

Company director Eric Bloch said, “Over the last few years, the greatest contributant to the Zimbabwean economy has been the development and expansion of mining and that sector’s increased production. However, the first quarter of 2014 witnessed some decline with mining income (exclusive of March, 2014 diamond and coal sales) falling by 15.4 percent as against the previous comparable period.

“Total income was $435 million against $502 million in the previous comparable period. The output for the quarter included gold production of $134 million as compared with $169 million last year.”

He noted that the income declined despite increased gold production volumes. “The decline was triggered by reduced world gold prices which were extremely volatile during the period.”

Platinum yielded $129 million in the quarter compared to $149 million in the same period last year.

The firm attributed the diminishing income in the sector to low platinum prices worldwide combined with a local decline in production from 3,300 kilograms to only 300 kilograms.