Been hammered in zimbabwae....have to read down a bitBy...

Been hammered in zimbabwae....have to read down a bit

By MacDonald Dzirutwe HARARE, May 5 (Reuters) - Zimbabwe's gold output plunged 76 percent during the first four months of 2009 after most miners shut their operations last year at the height of a political crisis, a senior industry official told Reuters on Tuesday. Gold producers are now re-starting production after new rules allowed them to sell gold directly to the world markets but uncertainty over ownership laws is likely to keep big mining houses away from exploring the country's rich mineral deposits. Chamber of Mines President, David Murangari, said the entire mining sector was struggling due to lack of capital to re-start and increase production. 'The major challenge to the mining sector at the moment is financing needed to resume production as well as re-start exploration and development of new deposits. This is particularly so for gold mines,' Murangari said in an email in response to questions from Reuters. Murangari said gold output between January and April this year stood at 335 kg, down from 1,407 kg during the same period in 2008. Gold production for the whole of last year hit a record low of 3,072 kg from 6,798 kg in 2007. At its peak, Zimbabwe produced an average of 2,400 kg of gold a month. Gold contributes one-third to Zimbabwe's dwindling export earnings since the collapse of commercial agriculture after President Robert Mugabe's government started in 2000 forcibly taking land from white farmers to resettle blacks. Miners have since 2002 struggled with a political and economic crisis and foreign currency shortages, forcing mines to shut down while skilled labour flocked to neighbouring South Africa and as far as Australia. But gold producers now want to re-open their mines after Zimbabwe's central bank in February relinquished its role as sales agent for gold, allowing firms for the first time to sell the metal and keep all the proceeds. The country's biggest gold producer, Metallon Gold, London-listed Mwana Africa and Canada's New Dawn Mining Corp, have plans to re-open their mines within months. Formed in February, Zimbabwe's new unity government of Mugabe and his main political rival Morgan Tsvangirai ended a long period of uncertainty and this has buoyed investor interest in mining, Murangari said. 'There are several enquiries from new investors interested in investing in the mining sector. This is more so after the formation of the inclusive government,' he said. 'The formation of the inclusive government should help encourage investment in the mining sector as this builds confidence in the future stability of the country.' But existing gold miners are still owed millions by the government for their past gold deliveries, Murangari said. 'A final decision (on this issue) is needed from government to assure investors who are appearing hesitant to put new money to resuscitate the gold sector,' he said. (Editing by James Macharia and Peter Blackburn) ([email protected]; +263 4 799 112 ) (For full Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/) Keywords: MINING ZIMBABWE/GOLD COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.