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Govt policies hit gold production

Eric Chiriga

A LEADING gold producing company says government policies are causing the decrease of the precious metal’s production.

>”Gold production in our group and in Zimbabwe is continuing to decrease due to these policies,” said Falcon Gold Zimbabwe Ltd chairman David Marshal in the company’s results for the year ended September 30.

He said the 50% foreign currency allocated to the gold mining groups from the United States dollars earned was still insufficient to create conditions to expand mining operations and exploration for real growth.

The Reserve Bank of Zimbabwe (RBZ) increased the foreign currency allocated to gold mining groups from 40% to 50%.

In the recently announced monetary policy the governor Gideon Gono said gold producers would continue to retain 50% of their foreign exchange earnings.

The other 50% would be surrendered to the central bank.

Of the 50% surrendered to the RBZ, 25% would be bought at the auction rate while the balance will be bought at the official rate of $824 per United States dollar.

Marshall said gold producers were being prejudiced by not receiving the higher dual rate currently $60 million per kg given to small-scale workers against the $10 597 per kg normally allocated.

He said they were not receiving their foreign currency for gold deposits on time, having been in arrears for approximately two months.

“These factors will continue to retard the process of major gold mining producers in Zimbabwe,” Marshall said.

He said Falcon Gold produced 696 kilogrammes and this created a profit of $1,42 billion which was a result of government moving the fixed exchange rate from $55 to $824: US$1.

Falgold’s gold production declined by 218 kg this year.

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