Saturday, June 30, 2007

Gold firms working one fifth of capacity

Zimbabwe's gold producers are operating below 20 percent of capacity while some have suspended operations over a deepening economic crisis and electricity cuts, the mining chamber said on Friday.

The news came after President Robert Mugabe on Wednesday threatened to seize and nationalise mines, especially gold producers he accused of smuggling the metal outside the country and stashing foreign currency earnings abroad as part of a campaign to undermine his government.

Gold is the main foreign currency earner for the southern African country's battered economy, accounting for 52 percent of total mineral production and a third of export earnings.

But producers are now struggling to stay afloat as the economy continues to slide, with inflation nearing 4,000 percent pushing up production costs while shortages of foreign currency and fuel continue to worsen.....

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