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Tuesday, May 28, 2024
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US financial crisis a silver lining for Zimbabwe’s mineral sector

Story by Davison Vandira

ECONOMISTS have described the financial turmoil in the United States of America as a silver lining in the dark cloud for Zimbabwe’s mining industry as investors rally for the precious metals which are plentiful in the country.

The second major United States of America financial crisis has claimed Silicon Valley Bank’s scalp, triggering a bank run that is devaluing the US dollar, resulting in a surge in inflation figures in the world’s largest economy.

Consequently, since the beginning of last week, gold which is the safe haven for investors has been on a bull run, breaching the US$70 mark per gram for the first time this year.

The inverse relationship between precious minerals and the ongoing US financial turmoil has seen the country’s economists envisaging increased levels of mining production to cash in on high commodity prices.

“The financial quandary in the US is a blessing in disguise for mineral producing countries like Zimbabwe as we have witnessed some phenomenal gaining of commodity prices over the last week as investors are now running away from the inflation ridden US dollar,” said ZNCC CEO, Mr Christopher Mugaga.

Economic Analyst, Mr Kudakwashe Mugova said, “The crisis is good for us in that we are a reputable producer of precious commodities that investors are seeking cover from, what is yet to be seen is whether this will be sustained for long for us to benefit immensely.”

The unfolding monetary instability of the world’s largest economy is clear testimony that no country under the globe is immune to macroeconomic instability at one point or the another.

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