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Zimbabwe losing US$50 million in gold leakages every month

By Business Reporter – Thursday 13 December 2018

HARARE – (Mining Index) – ZIMBABWE is losing an estimated US$50 million every month in gold leakages as a result of the current dual payment system by government being done in both local and foreign currency.

Zimbabwe Miners Federation (ZMF) President Henrietta Rushwaya called on government to consider paying small-scale miners 100 percent in foreign currency for gold delivered to Fidelity Printers and Refiners (FPR) to curb smuggling and leakages.

“As a country, we are losing close to US$50 million every month through gold leakages and this is totally unacceptable, and to Fidelity we are kindly asking for 100 percent payment in foreign currency towards the production of whatever mineral we are producing in this country,” she said.

Rushwaya’s remarks were complimented by Mines and Energy Parliamentary Portfolio Committee chairperson, Temba Mliswa. “I’m not an economist but if people are exporting, give them 100 percent retention. They don’t have to come to you asking for foreign currency or go to the Reserve Bank asking for foreign currency. As long we think that we cannot give people producing 100 percent retention of the foreign currency, no one will.”

She added that FPR is not responding to current market rates where the greenback is being traded on the black market at exorbitant rates while miners fail to access cash from the 30 percent RTGs payments.

She noted FPR payment threshold of 70:30 foreign and local currencies respectively has fuelled the parallel market while promoting gold leakages as miners smuggle gold outside the country in search of the hard currency.

“This has resulted in rampant leakages of gold in this country therefore necessitating a reduction in our gold output to Fidelity, not towards the production of gold.”

“We are trying to make consented effort as a federation in ensuring that government gets to hear our plight and understand where we are coming from,” she said, adding that “As at end of November, from the 31 tonnes that had been supplied to Fidelity from the gold output, our small scale mining sector managed to outwit the so-called primary producers. We have managed to do 21 tonnes out of the 31 tonnes.”

“We want to encourage our members to produce more, such that by 2023, we would have outwitted the 100 tonne per year output,” said Rushwaya.

Turning to chrome miners, Rushwaya noted the miners were not happy with the chrome pricing system.

“As until the monetary policy presentation by the minister of finance, the sector was getting 65 percent paid in local currency and 35 percent paid in foreign currency and this is quite disheartening especially given the fact that the chrome mining sector is machinery intensive. You are looking at machinery lie excavators and front-end loaders which need to be imported. As long as the sector is not financially resourced in terms of foreign currency, this will continue hamper their production.” ENDS//

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