Gold deliveries drop 20%

BY FIDELITY MHLANGA

GOLD deliveries fell 20% in the first seven months of the year to 12,003 tonnes from 15,070 tonnes over the same period last year as the coronavirus pandemic takes its toll on output.

Due to Covid-19 cross border travel restrictions, miners have not been able to import consumables.

In July alone, the deliveries dropped 49% to 1,406 tonnes from 2,776 tonnes, figures from Fidelity Printers and Refinery show. Of that total, 747 kilogrammes came from small scale miners while primary producers delivered 658kg.

Gold exports for the month fell to 1,37 tonnes, fetching US$79,3 million compared to 2,1 tonnes which earned the country US$97,4 million last year.

Fidelity raised the foreign currency threshold to 70% from 55% for primary producers but deliveries continued to fall, forcing it to give 100% US dollar payment to small scale miners at prevailing international prices.

The central bank subsidiary also deserted its flat payment of US$45,000/kg for the prevailing market price.

The move to award small scale miners 100% USD cash payment and while offering 70% foreign currency retention to primary producers has been lambasted by experts as illogical since the primary miners could use small scale miners to get 100% forex payment.

As at August 14, prices averaged above US$53 per gram, a situation which Fidelity believes will attract more miners to sell their produce formally.

With no access to foreign credit lies, Zimbabwe depends on gold and tobacco earnings and remittances from the diaspora for forex earnings.

In 2019, gold export receipts went down 28% to US$946 million from US$1,33 billion the year before. Earnings from tobacco exports also dropped 7% to US$846,7 million from US$90,8 million in 2018.

Economist Victor Bhoroma attributed the drop in gold delivered to delays in payments by RBZ.

“Payments through Fidelity Printers & Refiners (FPR) have been behind schedule for months so producers either stock pile or they divert to parallel market gold buyers who pay cash on the spot at prices above US$56/gram,” Bhoroma said.

“Secondly large-scale producers are clamouring for 100% forex retention on gold exports so they match small scale producers.

Most have now developed strategies to sell their gold to dealers via small scale and artisanal miners.”

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