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Gold deliveries to Fidelity dip 40 percent

By Business Reporter – Saturday 13 September 2019

BULAWAYO (Mining Index) – GOLD deliveries to Fidelity Printers and Refiners (FPR) stood at 12.3 tonnes for the period January to June 2019, a 40.6 percent slump compared to 17.3 tonnes that were delivered during the comparable period in 2018.

Government set a 40 tonne gold output target for 2019, after surpassing 30 tonnes benchmarked in 2018 which saw 33.2 tonnes delivered to Fidelity FY2018.

At least 20 tonnes of gold should have been delivered to FPR by 30 June 2019. With only 12.3 tonnes recorded, the gold sector is behind its target by 7.7 tonnes.

Gold deliveries to FPR stalled after the Reserve Bank of Zimbabwe (RBZ) governor John Mangudya in February this year revised downward foreign currency retention threshold for small-scale miners for hard currency and RTGS dollars to 55:45 percent respectively. Previously, miners were getting 70 percent foreign currency with the 30 percent paid in local currency.

“Exchange rate, pricing and payment issues, which partly accounted for the decline in deliveries, have, however, been largely resolved through the recent monetary policy measures,” said Mangudya in his 2019 mid-term monetary policy statement for the half-year period ended June 30 2019.

In 2018, small scale miners accounted for 21.7 tonnes of the annual total gold output compared to 11.5 tonnes from primary producers.

“It is however pleasing to note that small scale producers, despite facing a plethora of challenges, continued to dominate the country’s gold deliveries. Primary producers contributed the remainder of the total output,” he said.

Of the US$2.58 billion worth of Global Foreign Exchange receipts recorded as at 30 June 2019, the mining sector contributed US$1. 2 million down from US$1.5 million record same period last year, a 19.6 percent fall.

Export shipments for the same period stood at US$1.9 million, a 7.5 percent decrease from US$2.06 million registered during the comparable period last year. Mining contributed US$1.3, a 14.3 percent decline relative to the same period in 2018.

Foreign payments dropped 30 percent to US$1.7 billion from US$2.4 billion in the same period in 2018.

The country’s exports for the period under review were mainly destined for South African, Asian and European markets.

“South Africa continues to be the major destination for Zimbabwe’s total merchandise exports, absorbing about 46 percent. Major exports to South Africa include platinum group of metals (PGMs), gold and nickel among others,” he said.

Zimbabwe’s gold is sold to the global market in United States dollar through a middleman, South African Rand Refinery. As a result, the country loses 0.3 percent of total foreign currency earnings. ENDS//

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