Zimbabwe’s Gold Output Soars 43%, But Currency Rules Slash Miner Earnings
Soaring gold prices are driving a surge in Zimbabwe’s gold production and export revenues, but restrictive foreign currency retention policies are significantly eroding mining companies’ earnings, the country’s mining industry association warns.
Gold prices have jumped by over $800 an ounce since the start of the year, peaking at $3,500 an ounce in April before easing slightly to around $3,300 an ounce.
The rally has been fueled by strong central bank demand, geopolitical tensions, and uncertainty in global markets.
According to official data, Zimbabwe’s gold export earnings reached $740 million in the first five months of 2025, marking a 25% year-on-year increase. At the same time, gold production rose by 43% to 20 metric tons in the six months to June.
However, a government policy requiring exporters to retain only 70% of their earnings in US dollars—with the remaining 30% converted to Zimbabwe’s volatile local currency—is creating financial strain across the sector.
“This policy significantly reduces the real value of our earnings,” said John Musekiwa, President of the Chamber of Mines of Zimbabwe, in an interview with Reuters.
Critics argue that the local currency remains overvalued and unstable, with many producers facing losses when their export proceeds are forcibly converted.
Zimbabwe’s local currency, reintroduced in 2019 after a decade of dollarisation, has been plagued by extreme volatility—including a 43% devaluation last September—and is increasingly rejected in everyday transactions, even by some government departments.
The government defends the retention policy as necessary to address Zimbabwe’s foreign currency shortages and to fund essential imports, such as electricity and grain.
However, many mining firms say they are still unable to meet their own import needs, as most suppliers demand 100% payment in US dollars.
Adding to the pressure, miners are currently required to pay 50% of their taxes and royalties in foreign currency.
Industry stakeholders are calling for reforms that would allow them to cover those obligations using the local currency instead.
“We’re earning forex but can’t fully use it to support our operations. That’s unsustainable,” Musekiwa said.
