ZIMBABWE could once again register another poor gold yield this year, after a leading mining group, RioZim, reported that production had plummeted in the first quarter of 2006.

Figures released by the RioZim in its first quarter production report last week showed that production at the mining giant's Renco mine dipped by 2.8 percent in the first quarter of 2006. The diversified mining house extracted 5 787 ounces of gold compared to 5 956 ounces during the same period in 2005. At 5 787, output was static with the one recorded in the fourth quarter of 2005.

RioZim has previously attributed the decline in gold production at its mine to intermittent power cuts effected by power parastatal ZESA Holdings and foreign currency shortages.

Zimbabwe's gold mines are facing serious fuel and electricity shortages and a foreign currency crunch, which is pushing up production costs and forcing the suspension of some operations. Another gold producer Falcon Gold has previously been forced to suspend operations at its Venice Mine due to unsustainable losses.

In 2005 central bank Governor Gideon Gono said the decline in gold output had worked against the country's target to grow exports. Statistics indicate that deliveries to the Reserve Bank of Zimbabwe (RBZ)'s Fidelity Refineries fell 37 percent from 21 342 kg's in 2004 to 13 453 kg's in 2005 robbing the country of US$160 million.

Gono blames smugglers for denting yields and came close to revealing the identity of the smugglers in January. But the Chamber of Mines, which represents the gold miners, says though smuggling could be contributing to the decline in output, there had been depletion of surface gold while currency shortages have continued to pin down both small and large-scale miners.

The drop in gold output comes on the backdrop of Harare's threats to seize more than half the shares in foreign owned mines.

The government says the nationalisation plan, which has worked up most miners, is meant to indigenise the delicate sector. However, large scale miners have reacted to the seizure threats by freezing expansion and potential investment projects.

Although Zimbabwe has historically been a prominent gold producer in Africa, political and economic issues have pushed the country off the continent's top five producers' list.