, pub-3787448768440954, DIRECT, f08c47fec0942fa0 [google-translator]

Gold deliveries lose glitter

By Business Reporter – Monday 17 February 2020

HARARE (Mining Index) – GOLD deliveries to Fidelity Printers and Refineries (FPR) slumped 17 percent to 27.66 tonnes, falling short of government’s initial set target of 40 tonnes FY2019.

“Gold deliveries to Fidelity Printers and Refiners (FPR) for the period January to 31 December 2019 were 27.66 tonnes, a decline of 17% from 33.29 tonnes recorded during the same period in 2018. The national gold target for 2019 was 35 tonnes,” said central bank governor John Mangudya while presenting the Monetary Policy Statement today.

He alluded the decrease to electricity challenges affecting the country and lack of mining equipment among artisanal and small scale miners who have become the cornerstone of the gold sector, contributing two-thirds of gold remittances to FPR.

John Mangudya – RBZ Governor

“The decline is attributable to electricity challenges coupled with inadequate equipment for small scale miners to access deep gold reefs and gold leakages through smuggling,” said Mangudya.

More mining firms including RioZim, Blanket Mine, Bindura Nickel Corporation (BNC) and state-owned Zimbabwe Consolidated Diamond Company (ZCDC) have hinted on options to build solar plants for their mining operations following power outages of up to 18 hours a day.

The decline in gold remittances to FPR is further worsened by gold leakages estimated to be $1.2 billion per annum as miners evade the 55 percent foreign currency retention being offered by Fidelity, clamouring for 100 percent retention.

In its 2019 third quarter trading update for the three months ended 30 September 2019, RioZim said the future and success of its mining operations hinges on the company being able to retain 100 percent of its foreign currency earnings to enable it to plan and provide for capital investment, without which its long term prospects will almost certainly cease to exist.

“The future of the Company hinges on it being able to retain its entire foreign currency, securing stable and consistent power supply and retention of its skilled personnel,” said RioZim.

“Future efforts to increase gold deliveries to FPR shall include enhanced capacitation of gold producers and formalisation of artisanal miners, coupled with rigorous monitoring of gold production and marketing,” added Mangudya.

Miner’s body, Zimbabwe Miners Federation (ZMF) recently announced a target of 80 tonnes of gold annually in tandem with the broad vision to catapult the mining industry into a $12 billion sector by 2023. ENDS// 

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