Zimbabwe’s central bank, The Reserve Bank of Zimbabwe (RBZ), has reviewed the country’s gold support price from Z$100 million up to Z$700 million in a desperate bid to contain the increased operational constraints being faced by Zimbabwe’s gold miners at a time when most firms are operating in the red due to the non-payment of the foreign currency component for gold remittances to Fidelity Printers, a subsidiary of the central bank.

In order to provide added support to the strategic gold sector, the Reserve Bank of Zimbabwe (RBZ) has reviewed the gold support price from Z$ 100 million to Z$700 million, the central bank said in a statement.

Gold mining sector players said the upward review of the gold support price was welcome but added that the central bank needed to constantly review the gold price in line with the international gold price which touched US$970 per ounce today.

The RBZ notice detailing the gold support price increase notes that the increase is with effect from the beginning of this month.

This price review is with effect from 1 March 2008.The latest gold price increase is the second such review this year as In January the government increased the gold support price to Z$100 million per gram.

The increase is however still behind the Zimbabwean parallel market gold price of around Z$1 billion a gram.

Zimbabwe’s gold production has plummeted to a meager 7 tonnes per year, as the operational environment remains increasingly constrained.

In the 12-month period to March 2007, Zimbabwe's gold production was a meager 8 tonnes. In the peak year of 1916, the country recorded production of 29 metric tons of gold and in a recent mini-peak in 1999 of 27 tonnes. Calendar 2006 output was around 16 tonnes.

Jack Murehwa, the chairman of the Zimbabwe Chamber of Mines says Zimbabwe remains the only country yet to gain from the current high global mineral prices. "Our industry continues to experience declines in volumes despite the very buoyant mineral prices which have prevailed for the past 18 months."

The central bank said it will continue to assess the operational viability concerns of this critical sector on an on-going basis.

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