Commodity Online
Gold contributes 35 percent of Zimbabwe's foreign currency earnings. But gold mines are shutting shops in this African country.

Reports say several gold mines in Zimbabwe have stopped operations as a result of inadequate capital. Metallon Gold, the largest gold producer in Zimbabwe with four mines, has since stopped production.

The company has also been hit by massive turnover of key staff after it failed to pay salaries for the past two months.
Metallon chief executive Collin Gura confirmed that production at his company was at a standstill.

Gold miners say they cannot continue with operations because the Reserve Bank of Zimbabwe has not paid their foreign currency revenue from gold sales. RBZ, through its subsidiary, Fidelity Printers, is the sole marketer of gold in the country.

Gold mining companies are obliged by law to sell their gold to the central bank, but for the past two years it has been falling behind on payments "due in terms of official policy to be made four days after delivery". 

Producers get 75 percent of the proceeds. But last week, the Chamber of Mines indicated that the central bank owed miners over US$30 million that has accumulated since March this year.

Gura, whose company controls over 55 percent of the country's gold industry, said he was optimistic that a solution would be quickly found to restore sanity in the sector.

Economists say e developments in the mining industry, which in recent years has been the country's major foreign currency earner, will worsen the performance of the economy.

Zimbabwe's position a major gold producer continues to slide as its once mainstay gold mining industry continues to decline as a result of political and social unrest.

Also, gold mining exploration has almost completely ceased in Zimbabwe and most underground mines had flooded, because they cannot pump water seeping into their shafts.