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35 tonne gold target not achievable – Fidelity

By Business Reporter – Monday 12 October 2020

HARARE (Mining Index) – FIDELITY Printers and Refiners (FPR) says the projected 35 tonnes of gold FY2020 may not be attained due to effects of the Covid-19 pandemic.

At the end of the third quarter of 2020, total gold delivered to Fidelity was recorded at 14,650.21 tonnes, barely half of the anticipated annual target.

27.66 tonnes were delivered to Fidelity FY2019, a decline from 33.2 tonnes recorded FY2018.

Deliveries by Artisanal and Small-scale Miners (ASM) during the third quarter dropped to 1462.213 tonnes, half of what they delivered during the second quarter of 2020 at 2478.1176 tonnes.

From January to September, ASM delivered a total of 7,512.02 tonnes of the bullion. 3,571.69 tonnes were delivered during the first quarter of 2020, 2478.1176 between April and June while 1462.213 tonnes were received by Fidelity between July and September 2020.

FPR received a total of 7,138.19 tonnes of gold from primary producers, recording 2,150.02 tonnes during the first quarter of 2020. Output by primary producers gained during second quarter, recording 2411.6582 tonnes, marginally increasing again during the third quarter to 2576.515 tonnes.

As at the end of the third quarter, ASM were slightly ahead of primary producers by 373.83 tonnes.

In May this year, Fidelity reviewed Zimbabwe’s gold trade framework which saw small-scale gold buying agents and artisanal producers receiving 100 percent of their gold deliveries in cash at a flat rate of US$45-00 per gram.

After miners quizzed the gazetted US$45 imposed as a flat rate on every gram of fine gold, FPR again reviewed the gold price, which was welcomed by most miners.

Despite Fidelity having curved in to miners demands to review the gold price, deliveries to Fidelity remained unsatisfactory.

FPF general manager Fradreck Kunaka said the effects of the Covid-19 pandemic have resulted in foreign currency bottlenecks causing delays in paying miners.

“It must be noted that the Covid-19 restrictions also affected movement of mining inputs thus causing the decline in the gold deliveries,”

“We are three months away from ending the year and we are currently on 15 tonnes. The 35 tonne gold output is a target which may not be attained due to factors highlighted above,” Kunaka.

“As long as Covid-19 is upon us, the gold deliveries will likely not show any meaningful increase since we do not locally produce the mining inputs or the cash required to pay for the gold delivered by small scale miners,” said Kunaka. ENDS//

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