Zimbabwe Looks to Gold to Stabilize New Currency, ZiG

Zimbabwe is urging its gold miners to ramp up production in a bid to bolster the nation’s newly launched currency, the ZiG.

Announced last month, the ZiG is backed by the country’s gold reserves, with the hope of establishing a stable local currency after years of economic turmoil.

Mines and Mining Development Minister Winston Chitando met with miners in the capital, Harare, on Monday, emphasizing the importance of increased gold output. “This new currency is anchored on gold production,” he declared, “we have to determine ways to increase production.”

The ZiG is backed by 2.5 tonnes of gold and $100 million, marking Zimbabwe’s sixth attempt at establishing a functional local currency within the past 15 years.

Previously, the country has struggled with hyperinflation and a reliance on foreign currencies.

To build its gold reserves, Zimbabwe has required miners to pay a portion of their royalties in both cash and commodities since late 2022.

Minister Chitando outlined plans to further boost production by encouraging collaboration between large-scale and artisanal or small-scale miners.

While production from medium-to-large-scale miners has already shown a positive increase in the first quarter of 2024 compared to last year, Zimbabwe is aiming for a significant leap.

The nation has set a target of 40 tonnes of gold production for this year, up from 30.1 tonnes in 2023.

The success of the ZiG hinges on Zimbabwe’s ability to meet its gold production goals. If they can achieve this, the new currency could offer a path towards economic stability.

Source: Mining Weekly