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GOLD EXPORT REMAINS STRONG AMID COVID-19-DELOITTE

18 May 2020
Dailynews
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The country’s gold export is expected to remain strong, amid the pandemic, pushed up by rising global demand.

Deloitte, Economic impact of the Covid-19 pandemic on East African economies report, showed that the increasing gold demand as a safe haven asset will provide a buffer to Tanzania’s mining sector.

“The increase in gold prices as a result of its increasing demand as a safe haven asset will provide a buffer to Tanzania’s mining sector.

“As such, the report issued this month, said, “the sector is expected to continue operating in the phase of the pandemic, albeit at a reduced level”.

Pre Covid-19, Deloitte report showed, the mining sector was expected to report increased growth as the government relaxed protectionist policies that required Tanzanian companies to own a majority stake in mining firms last year.

“This was expected to encourage foreign investment in the sector,” the report, which also gave the summary of government intervention measures and Deloitte insights, said.

According to Bank of Tanzania (BoT) latest Monthly Economic Reviews, gold exports rose to 2.32billion US dollars for a year ending March from 1.68billion US dollars of previous year.

However, Deloitte warned that, following the Covid-19 pandemic, the sector could be faced with challenges such as “global supply chain disruption that will decrease exports and the ceasing of operations by mines to comply with social distancing policies”.

Yesterday, global gold markets rose slightly as US stimulus talks and Federal Reserve Chair Jerome Powell's downbeat economic assessments supported the safe-haven metal.

Spot gold price climbed 0.1 per cent to USD 1,716.66 per ounce while US gold futures rose 0.6 per cent to USD 1,726.20.

The country mining sector reported a growth of 10.6 per cent in 2019, which was mainly due to an increase in the production of gold, silver and natural gas.

Petra Diamonds, operating the largest diamond mine in Mwadui, Shinyanga, first declared a force majeure and closure of operation from mid-last month but this month upheld the move till diamond market improved.

The firm said that the decision was necessary to preserve the Williamson mine’s cash position in order to protect the long-term sustainability of the operation.

“The company will look to resume operations once diamond prices are at a level that makes it operationally sustainable,” Petra said.