Reeling under a plethora of operational constraints and debilitating shortages of raw materials and foreign currency, Zimbabwe's gold mining sector - which has the theoretical capacity to produce 30 tonnes of gold per year - will produce a meagre 4 tonnes of the precious metal this year, the country's chamber of mines has revealed.

Zimbabwe recorded a sharp decline in gold output last year as figures indicated that the yearly production figure had tumbled to just 7 tonnes from the moderate 11 tonnes produced in 2006.

The Zimbabwe chamber of mines president Jack Murehwa told Mineweb that owing to the combined effects of foreign currency and raw material shortages as well as investor scepticism brought about by the government's controversial indigenisation legislation, gold production for the current year was projected to fall even further.

We (are) projecting production to be around 4 tonnes for this year, said Murehwa who is also chief executive of Impala Platinum's Zimbabwe subsidiary, Zimplats.

Zimbabwe has over the past few years witnessed a tumble in minerals output - with the exception of platinum - and this trend in minerals output decline, the chamber of mines president said, is attributable to a number of constraints.

The falling production can be attributed mainly to the pricing policy and, over the past one and a half years, the non-payment for gold deliveries from our single buyer of gold.

Under Zimbabwe's laws, only Fidelity Printers, a subsidiary of the central bank can buy gold bullion from producers.

Murehwa added: From our perspective, declining mineral production, especially gold, is largely because mines are either closing or curtailing production due to distorted local prices, power supply problems and inability to purchase imported inputs.

 Zimbabwe's mining sector, which is currently in turmoil following the recent amalgamation of the Economic Indigenization and Empowerment Act, has also bled its skilled labour-force as most of the qualified personnel opt for employment in other countries such as South Africa, Namibia  and Australia among others.

The Indigenization and Empowerment Act seeks to force all foreign owned companies to cede shareholding capacity amounting to 51 percent to local black Zimbabweans.

Rio Tinto, Impala Platinum, Anglo Platinum and Central African Gold are some of the foreign owned companies that might be affected by the new legislation.

However, Murehwa says Zimbabwe's mining sector could yet recover if the government manages to address issues such as the pricing system and the regulatory framework.

The Zimbabwe chamber of mines says the government must expedite and resuscitate exploration activities.

This, said Murehwa begins with the consideration of already submitted applications for Exclusive Prospecting Orders (EPOs) which have remained unsigned for the past 4 years.  

 If we want mining investment in this country we need to have in place a legal framework that will persuade the investors to use their funds here rather than elsewhere, he remarked.