Mining shares on the Zimbabwe Stock Exchange (ZSE) took a hit, reversing gains that were accrued in the past month, amid challenges including expected reduced output for 2019.
The ZSE mining index plummeted 55 points or 17 percent to 259,73 during the seven days to Wednesday. That compares with the previous week’s closing level of 314,86 points.
Nickel miner Bindura and gold major RioZim, dragged the index lower, both nose-diving spectacularly by 18 percent and 17 percent respectively.
During the period under review, Bindura announced that its ultimate shareholder ASA had concluded the sale and purchase agreement with the third party, which has been under long running negotiations.
Falgold, the other stock completing the Mining Index’s handful of counters, closed unchanged at 3c while Hwange remains suspended.
Indications are that the country may not meet the 40-tonne target for gold this year due to a drop in deliveries to Fidelity Printers and Refiners.
Last year’s deliveries reached 33,2 tonnes, surpassing the set target of 30 tonnes. This year’s target of 40 tonnes is in line with Government’s ambitious 100-tonne mark by 2023.
As of September, 20,5 tonnes had been delivered to Fidelity representing a 31 percent decline from the 29 tonnes that was delivered during the same period last year.
Government envisions a US$12 billion mining industry by 2023, which should help drive economic growth, as the country moves towards achieving an upper middle income economy by 2030 with a per capita of US$3 500.
Gold is seen playing a critical role in this mining sector growth as it is the country’s biggest single foreign currency earner, ahead of tobacco.
However, some macro-economic factors may pose a series of challenges to this, key among them foreign currency shortages, lack of capital for retooling, utility challenges as well as fluctuating global prices of commodities.
As of yesterday, gold prices on the global market rose as the USD weakened after the Federal Reserve cut interest rates for the third time this year, but signalled the monetary-easing cycle would be paused.
Spot gold was up 0,77 percent to US$1 506,20 per ounce.
On the other indicators on the local bourse, the ZSE All Share Index put on 1,87 percent to 231,43 points while the ZSE Top 10 Index paced the fastest with a 2,86 percent gain to 213,55 points.
At 773,35 points, the Industrials Index laboured to modest gains of 2,2 percent as the majority of shares traded flat.
Total market value eased a marginal 0,29 percent to $30,2 billion. Regional cement maker, PPC headlined the week’s risers with a 28 percent jump to $4 followed by agriculture concern, Ariston that rose 26 percent to 15,89 cents.
Leading the losers, the duo of Masimba and TSL fell 20 percent each to close at 15,2 cents and 60 cents respectively.–herald.co.zw