Sales from smaller miners had declined by 23% last year due to delayed payments from Fidelity. In 2024, faster payments and the mid-year removal of VAT on gold sales encouraged producers to sell more gold to Fidelity.

Dallaglio, the gold arm of Padenga, produced 2,025kg in the nine months up to September, reflecting a 22% increase from the same period in 2022.

The company benefited from the US$86 million invested into mining over the past five years. Most of the capital expenditure last year was allocated to Pickstone, which is transitioning from an open-pit mine to an underground operation to boost production.

Caledonia produced 1,610kg up to September and has projected a full-year output of around 2,200kg for 2024.

Kuvimba Mining House, the country’s largest producer, earlier projected a production of 3,500kg for 2024.

Gold miners experienced favourable market conditions, with gold prices rising by 27% in 2024. However, rising costs and economic policy challenges have constrained their operations.

Energy costs remain a significant concern for miners, according to a survey by the Chamber of Mines late last year. Miners pay an average of USc14.21/KWh, with a peak tariff of approximately USc19/KWh.

During power cuts, miners resort to using diesel power, which has an implied tariff of over USc30/KWh. The mining industry is estimated to lose up to 10% of potential output due to power outages.

Miners receive 75% of their export earnings in USD and the remaining 25% in ZiG. The rapid depreciation of the local currency erodes the value of the surrender portion of their earnings by over 50%, effectively imposing a 12% tax on exporters’ gross proceeds.

More: Pindula News