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Reprieve for gold miners

The Reserve Bank of Zimbabwe (RBZ) has slashed small scale miners’ royalties and the cost of importing cash as part of efforts to improve gold deliveries to Fidelity Printers and Refiners (FPR) and stem the smuggling of the yellow metal.

FPR is now buying gold at the prevailing international gold prices.

Earlier this week, the spot price for gold in the international market was US$57,225 per kilogramme.

Analysts said the move was triggered by the plummeting output of the yellow metal.

This worried the monetary authorities.

ZMF chief executive officer Wellington Takavarasha said there have been some improvements on gold deliveries in the past week.

“With the granting of the right to sell the yellow metal at the prevailing international gold price, removal of punitive taxes and cost of importing cash, gold deliveries had been high in the past 10 days,” Takavarasha said.

“We are happy to tell you that from Monday last week, our members were delivering to FPR and were paid on the spot. Last week alone, we delivered   over 0.350 tonnes which is a huge jump from other weeks we could deliver less than 0.1 tonnes per week.”

He said all outstanding payments to ZMF members were paid as FPR took heed of RBZ governor John Mangudya’s word of “giving us competitive prices”.

Takavarasha encouraged ZMF members to continue selling gold to FPR as it is paying at the same rate as the parallel market.

“Why do we have to go to the black market or smugglers when the formal sector is paying more than the cartels,” he said.

During the past three years, small scale miners delivered close to 70 tonnes of gold to FPR against large scale miners’ output of 52 tonnes.

Given that the small-scale miners are highly informalised, their gold is prone to smuggling as they sell it to the highest bidder.

In his Monetary Policy Statement in February, Mangudya attributed the fall in gold deliveries to the subdued performance by the small scale miners.

But FPR wants the spot payments to continue to improve deliveries.

FPR acting general manager Peter Magaramombe said the gold buyer has no payment backlogs.

“Payment on time is good but there is need for incentives to improve   the output in the long run. It is thus expected that there will be an improvement in deliveries,” Magaramombe said.

He said the small-scale miners are paid as they step in with their gold into FPR while the large- scale miners are paid within seven days of delivery.

Zimbabwe’s gold output plummeted 31% to 19.052 tonnes in 2020 from 27.66 tonnes recorded in 2019 due to Covid-19 effects, delays in payment and low foreign currency retention levels.

Gold deliveries for January 2021 were 0.99 tonnes from 2.54 tonnes during the comparable period last year.

Large scale producers delivered 0.64 tonnes while small scale miners delivered 0.35 tonnes to FPR.

Gold export receipts in January 2021 were at US$53.1m from US$98.1m during the same month last year due to subdued deliveries due to Covid-19 effects, heavy rains that the country experienced in January and the failure to remove costs on small scale gold miners.

In a recent mining report, mining experts advised that President Emmerson Mnangagwa’s government should give artisanal mining cooperatives legal standing, pay gold producers at world prices and strengthen mining dispute resolution.

Zimbabwe is targeting 100 tonnes of gold per year by 2023. Business Times

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