Gold deliveries to Fidelity Printers and Refiners (FPR) surged 45% to 25.36 tonnes in the 11 months to November 30 2021 from 17.44 tonnes delivered in the prior comparative period due to improved mining conditions and incentives.
The current gold output of above 25 tonnes is the third highest national production level with a month to go, amid indications the annual output will surpass 28 tonnes.
In June, Zimbabwe’s total yellow metal output stood at 9.948 tonnes. In the past five months, gold producers delivered 15.41 tonnes due to the 5% incentives given to those who deliver above 20 kilogrammes monthly.
FPR gold operations head, Mehluleli Dube, told Business Times that more incentives are coming to ramp up production.
“As at November 30 2021, 25.36 tonnes were delivered to FPR against 17.44 tonnes delivered during the same period last year. This was due to timeous payments, incentives and payment at the international gold prices rate,’ Dube said.
“November 2021 gold output rose 127% to 3.33 tonnes from 1.47 tonnes recorded during the same period last year.”
The November production is the highest monthly output this year ahead of September with a haul of 3.17 tonnes.
From the cumulative deliveries, small scale miners delivered 15.21 tonnes with primary producers accounting for 10.14 tonnes.
Experts say output will rise to 36 tonnes with relaxed mining policies.
But policy inconsistency has dealt the country’s output a heavy blow as authorities take long to implement favourable mining policies.
On June 17 this year, RBZ scrapped taxes on small scale miners, began timeous payments and paid the prevailing international gold prices.
This reduced the impact of gold smugglers who were taking advantage of an unfavourable payment regime with estimates showing that smugglers were salting away about 3 tonnes annually.
Despite posting impressive numbers this year, Zimbabwe is still at the quarter of achieving the 100 tonnes target by 2023.
Experts say there is a need to review retention for the large scale miners and capacitation of small scale miners to ramp up production.
“The large scale miners fire assay price is 98.75% of the London Bullion Market Association ruling price payable within a week in the model 60% Nostro – 40% ZWL RTGS and is subject to a 5% royalty deduction. And with these hindrances, some large entities under-declare gold as they get way lesser than they are supposed to get,” a miner who preferred anonymity said.
“Some small scale miners are reluctant to sell to Fidelity Gold Refinery (FGR) because they know that Zimbabwe Revenue Authority (Zimra)will access their information from FGR, they then prefer selling to parallel market where the tax collector does not have access to their records.”
Added the miner: “The authorities should not chase after taxes as they should evaluate the cost of losing billions of US$ against limited amounts from taxes.”
FPR acting general manager Peter Magaramombe said there are plans to increase presence by establishing more gold buying centres in all active regions. (Mining Zimbabwe)