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Call for improved mining policies

Gold deliveries declined by 16% and 43% respectively in the year 2019 and 2020 with 27.6tonnes and 19.05 tonnes, as compared to 33.2 tonnes in the year 2018.

Fidelity Printers and Refiners (FPR) is lobbying the government to come up with improved mining policies and incentives to ensure that the 100 tonnes target is met by 2023 acting general manager Peter Magaramombe has said.

The call comes amid revelation some small scale miners were now shying away from the country’s sole buyer and marketer of gold, Fidelity.

It is understood the miners were preferring parallel market gold buyers to avoid taxation issues.

They said if they deliver to Fidelity, ZIMRA would access their information.

“Achievement of the 100 tonnes target by 2023 is feasible though it involves multi-stakeholders.

“Fidelity is lobbying the government for the policies that promote investments into the gold mining sector, come up with loan facilities to capacitate existing and new gold mining ventures, retain the favourable currently obtaining incentive regime and eliminate delays in payment of producers,” Magaramombe said.

The small scale miners who account for over 60% of the country’s gold deliveries are not in agreement with the fire assay price of 95.5% of the London Bullion Marketing Association ruling price payable within 24 hours in cash and are subject to a 1% royalty deduction.

With this stumbling block in the way of FPR, the sole buyer, would want the government to relax its stringent rules to collect as much gold as it can to meet the target.

FPR has also put in place a number of interventions to effectively play its role towards achieving the target which include plans to increase gold buying centres in all active regions and finalising the mechanism that will result in purchasing five grammes and below from the artisanal and small scale miners.

The implementation of the initiatives is set for 2022.

Outside of the Msasa Head Office, FGR currently has 11 gold buying centres strategically located to buy gold produced in those regions such as Kadoma, Kwekwe, Chinhoyi, Bindura, Masvingo, Mutare, Zvishavane, Gweru, Bulawayo, Filabusi and Gwanda.

Fidelity has already identified other areas where gold buying centres will be established in the coming year to enhance accessibility and convenience to artisanal and small-scale mining groups.

It is planning to open its buying centres seven days a week to enhance convenience and reduce potential leakages upon relaxation of Covid – 19 restrictions and in the meantime, Fidelity shall continue to use its agents to mobilise gold from areas where it does not have its presence.

Magaramombe said there are no delays in payments which were previously experienced as a result of excessive scrutiny by foreign banks whenever Fidelity was suspected to be dealing with red flagged institutions or individuals.

Gold deliveries declined by 16% and 43% respectively in the year 2019 and 2020 with 27.6tonnes and 19.05 tonnes, as compared to 33.2 tonnes in the year 2018.

At the current rate of gold deliveries of around three tonnes per month, a total of approximately 28 tonnes are projected by December 31 2021.

Since June the gold miners are averaging three tonnes per month from just above 1.6 tonnes during the first half of the year.

In June 2021, the half year gold output was 9.948 tonnes but the output surged over 12 tonnes within four months to 22.024 tonnes due to 5% incentives and timeous payments.

“The decline of gold receipts from artisanal and small-scale miners registered in the first quarter of 2021 has been turned around owing to the obtaining incentive regime.

“The upward price review (100% USD cash to small scale miners) and reduction of royalty to 1% for small scale miners and artisanal miners have played a major role in boosting gold deliveries from the two groups,” Magaramombe said. (Business Times)

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