RBZ Fails To Pay Gold Producers US$25m

THE Reserve Bank has failed to pay US$25 million to gold producers for deliveries made in June this year prompting miners to seek intervention from the president’s office, businessdigest can reveal.

In a correspondence written to Misheck Sibanda-chief secretary to the president and cabinet two weeks ago, disgruntled gold producers appealed for an urgent intervention from government to speed up payments by Fidelity Printers and Refiners dating back to March.
Fidelity Printers, a subsidiary of the Reserve Bank buys the precious metal from 354 registered gold workings that include 21 primary producers, 252 small-scale miners and 81 custom millers under a government support price facility, which is below world market prices.
Under this facility, producers are paid 55% of the deliveries in foreign currency with the remaining 45% being paid in local currency.
“We respectfully write this letter to humbly seek your intervention on behalf of the gold producers in Zimbabwe as we have exhausted all other avenues, in an attempt to receive payment due to them for gold bullion delivered to Fidelity Printers and Refiners from as far back as March of this year,” read the letter.
Continued efforts to engage the Reserve Bank, the finance and mines ministries through the Chamber of Mines of Zimbabwe, the letter read were not fruitful resulting in gold miners seeking immediate assistance from the president’s office to avoid a “grind to a halt” in the troubled sector.
The gold producers also blamed delays by the Reserve Bank for “reversing the trend” of gold production, which at peak, surged to a post independence record of 27 metric tonnes in 1999.  Apart from the lethargic foreign  currency  payment  arrangement,  gold producers
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warned that recent delays in effecting payments in local currency could stir labour relations problems at mines.
“In recent months gold producers have experienced delays in the payment of the Zim dollar component of revenue from gold delivered to Fidelity Printers and Refiners. This situation has the potential to cause severe labour relations problems as gold producers face challenges in paying salaries and wages.”
Efforts to get comment from Sibanda and the Reserve Bank governor Gideon Gono were in vain. Meanwhile, the central bank this week awarded a 150% bonus in local currency for the gold sector in an effort to “give impetus” to the miners.
Mining experts expect gold extractions to decline sharply to 4,5 metric tonnes owing to lack of timely payments by the central bank, power and a host of viability problems affecting the sector.
Turning to accusations of “glaring discrepancies and financial prejudices” leveled on the sector by the central bank, gold producers refuted the claims saying monitoring and supervising teams comprising of ministry of mines officials, the police minerals unit, the Reserve Bank of Zimbabwe and forensic audit firm Alex Stewart International failed to substantiate reports of any “underhand dealings”.
A leading gold producer last month blamed declining gold deliveries to an “artificial exchange rate”, delays by the central bank in effecting payments and bureaucracy resulting from numerous regulatory authorities.
Last year gold accounted for 10% of the country’s foreign currency earnings generating US$150 million.

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