HomeEconomyZim records 5 tons of bullion in Q1

Zim records 5 tons of bullion in Q1

GOLD deliveries to Fidelity Printers Refinery (FPR) for the first three months of 2016 have reached five tonnes, with annual production envisaged to grow by 20% to reach 24 tonnes at the end of the year, Finance minister Patrick Chinamasa has said.

Chinamasa said government is finalising a gold finance facility with the with a view to ramp up gold production in the country.

“We are in the process of negotiating a gold finance facility with Afreximbank (African Export-Import Bank) and I think it’s a done deal. Because of fiscal pressures, I believe we have done exceedingly well from 13 tonnes in 2013 we hit 20 tonnes last year. This year we are planning to do upwards of 24 tonnes,” Chinamasa told delegates attending a welcome dinner for visiting Afreximbank president Benedict Oramah in Harare last week.

“In the first three months of this year we have purchased already five tonnes that has been purchased by Fidelity Printers and Refinery.”

Of the five tonnes delivered in the first quarter, small scale miners contributed 40%.

Small scale miners last year produced 8 tonnes out of a total 20 tonnes delivered in 2015.

Gold is currently the largest foreign currency earner in the country with exports valued at US$503 million by end of October last year.

The increase in gold deliveries by small scale miners and artisanal miners who in 2013 was at 1,7 tonnes was buoyed by the establishment of the Gold Compliance and Enforcement Coordination Unit (GCECU) in 2014 which arrested gold leakages and ensured increased gold sales to FPR.

GCECU comprised of ministries of Mines; Finance; Local government the Reserve Bank of Zimbabwe; Office of the President and Cabinet; Zimbabwe Republic Police Minerals Unit; Environmental Management Agency and Zimbabwe Revenue Authority.

According to the 2016 budget, notable progress has been made following the budget ban on export of unrefined gold and designation of Fidelity Printers and Refineries (FPR) as the sole buyer and exporter of gold in December 2013.

Government also reduced the royalty on gold produced by primary and small scale producers from 7% to 5% and 7% to 3%, respectively, with effect from October 2014 in response to declining gold prices.

The royalty rate for small scale producers was further reviewed downwards from 3% to 1% in September 2015 to curb leakages.

An increase in deliveries to FPR from informal, small and large scale producers contributed immensely towards the economy’s export earnings with the government providing incentives to grow the sector.

“We want to continue supporting the small scale gold producers by providing them with equipment. We are starting the mobile buying units this month. The fact that the small scale sector contributing has been increasing it means gold mobilisation has been successful,” RBZ governor John Mangudya said recently.

Sustained decline in the international gold price, inadequate working capital and recapitalisation, low capacity utilisation in primary gold production has been militating against the viability.-Fidelity Mhlanga

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