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Depleted gold deliveries to Fidelity force government to introduce gold support price

By Business Reporter – Wednesday May 15 2019

HARARE (Mining Index) – FOLLOWING depleted deliveries of the yellow metal to Fidelity Printers and Refineries (FPR) in the first quarter of 2019, the Reserve Bank of Zimbabwe (RBZ) introduced a gold support price as an incentive to gold miners to sell gold through formal channels.

Mines and Mining Development Minister Winston Chitando was quoted saying the introduction of a gold support price of US$44 000 per kilogram and US$1 368,55 an ounce is ‘a reflection of government’s commitment to providing incentives to productive sectors that have a potential of facilitating economic growth.’

FPR said the gold support price and the duration of the facility will be reviewed from time to time.

Artisanal and small-scale gold miners have been unhappy with policy changes which saw a downward review of foreign currency retention threshold for hard currency and RTGS dollars to 55:45 percent announced by the central bank governor earlier this year in the mid-term monetary policy statement.

Previously, miners were getting 70 percent foreign currency with the 30 percent paid in local currency.

Despite closing 2018 on a high note recording a whopping 33.2 tonnes of gold deliveries to Fidelity, the highest since 1980, gold deliveries were depressed in the first quarter of 2019.

Government earlier this year set a 40 tonne gold output target for 2019, after surpassing 30 tonnes benchmarked in 2018.

Zimbabwe Miners’ Federation (ZMF) countered governments 2019 gold target, expecting to surpass the 40 tonnes by an additional 10 tonnes, bringing the total gold production for 2019 to 50 tonnes.

Despite an anticipated monthly average delivery of 3.33 tonnes, 2.14 tonnes of gold were delivered to FPR during the month of February 2019, while 1.77 tonnes were delivered in January, creating a shortfall of 2.75 in the first two months of the year. ENDS//




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