Zimbabwe’s gold production plunged by 61 percent to 295.57 kilogrammes (652 pounds) in March compared to February because wages are being held back, a mining association said on Tuesday.

“We have the potential to produce 30 tonnes of gold annually but right now production is going down monthly,” Jack Murehwa, head of the Chamber of Mines, an association of mining companies, told AFP.

“The major problem we have is that the Reserve Bank has not paid most miners and they have not said anything to us as to why they are not paying the miners. There is nothing coming from them.”

The state controls production of gold in Zimbabwe and pays salaries directly to the miners, who are supposed to receive 35 percent of their wages in the local currency and 65 percent in US dollars.

But the dollars are not being paid out and the local currency is hugely overvalued as the country experiences record high rates of inflation — officially put at 165,000 percent in February.

Production went down by 47 percent in January and by 56 percent in February.

Gold has traditionally been one of Zimbabwe’s main foreign currency earners but the mining sector has been hamstrung in recent months by power cuts and shortages of foreign currency for renewing equipment.

In a statement to shareholders, Falcon Gold Zimbabwe, one of the country’s top gold producers, blamed power cuts, a shortage of supplies and the lower quality of the ore mined as the main reasons for lower gold production.

Falcon Gold Zimbabwe, which produced 419 kilogrammes of gold in 2007 compared to 511 kilogrammes in 2006, also said the Reserve Bank was lagging behind in its pricing for gold amid record highs on global markets.