As Southern Africa sees a renewed interest in gold investment, further progress is required to unlock sustained growth across Zimbabwe’s gold sector, where mining remains a cornerstone of the country’s economy, contributing about 14.5% of GDP and close to 80% of export earnings, highlights gold producer Caledonia Mining CEO Mark Learmonth.

The country’s gold sector has also benefited from several meaningful reforms in recent years, with changes to foreign exchange retention and greater flexibility in gold export and settlement mechanisms serving to improve capital planning and investor confidence.

Zimbabwe continues to improve in terms of investment attractiveness, reflected in its improved ranking on the latest Fraser Institute yearly survey, which puts it in the top ten mining jurisdictions in Africa, he adds.

“This represents a material improvement in investor perception and reflects an improvement in the economic environment, policy clarity and regulatory consistency which, from Caledonia’s perspective, is the most important improvement.”

However, despite these improve-ments, Learmonth points out that reliable and affordable power supply remains a critical constraint, particularly for underground and energy-intensive operations.

The ongoing investment in infrastructure, alongside continued policy consistency and constructive engagement between government and industry, he notes, will be essential to attract long-term capital and support the development of larger, globally competitive gold projects.

Taking these factors into account, Caledonia’s operating model in Zimbabwe is built around disciplined capital allocation, a strong safety culture and deep local partnerships, notes Learmonth.

The company has been operating in the country for two decades, during which time it has “fundamentally transformed” its flagship Blanket mine’s production profile, he notes.

Through sustained investment in underground infrastructure, including a new deep shaft, Caledonia has more than doubled Blanket’s yearly production capacity – from 35 000 oz in 2011 to about 75 000 oz/y in 2026, highlights Learmonth.

A key differentiator is the company’s focus on developing and retaining local skills, as Blanket employs more than 2 000 Zimbabwean nationals. The company is also investing heavily in training, succession planning and operational leadership at site level to improve productivity and safety outcomes, and build long-term resilience into the operation.

For Caledonia to remain sustainable in a challenging operating environment, Learmonth says long-life gold mining operations in Zimbabwe require a balanced approach, combining technical excellence with strong local engagement and social licence to operate.

Cost Pressures, Capital Allocation

While robust gold prices continue to support revenues, inflationary pressures have become increasingly evident across key input costs, and for Caledonia, the most significant cost drivers are energy, labour and mining consumables.

To protect profitability, Learmonth says the company focuses on a combination of operational discipline and longer-term strategic initiatives, such as flexible mine planning, to optimise mined grade and throughput, continuous underground productivity improvements, as well as disciplined cost-control across procurement and contracting.

Energy security has also become a particularly important lever to improve sustainability and operational efficiency. Reducing reliance on grid power and securing access to renewable energy enables Caledonia to lower unit costs and improve operational reliability, while maintaining a conservative balance sheet to provide resilience during periods of cost volatility.

“Caledonia’s approach to capital allocation is guided by rigorous technical and economic evaluations, whereby the company prioritises investments where strong operational knowledge already exists alongside a clear line of sight on execution, and the ability to generate sustainable cash flow across the mining cycle,” adds Learmonth.

In parallel, the company is advancing development and exploration projects, such as Bilboes and Motapa, in Matabeleland North province, 75 km north of Bulawayo, which offer material scale and long-term growth potential.

Learmonth also notes that Caledonia closely examines geological quality, production profiles, fiscal and regulatory stability, and the extent to which the company can leverage its existing operating expertise for new projects.

As such, the company’s growth strategy remains centred on building a multi-asset gold business in Zimbabwe, where it sees significant untapped potential when projects are developed at scale and with long-term discipline.

In this regard, he highlights the Bilboes project, which is expected to produce about 1.5-million ounces over a 10.8-year life-of-mine, as a major focus for the company over the coming decade.

“Bilboes has the potential to be a transformational asset for Caledonia, significantly reshaping our production profile,” concludes Learmonth.