STATE-owned gold buyer, Fidelity Gold Refinery (FGR) is bullish on hitting a 40-tonne gold delivery target in 2023 buoyed by new gold mining projects coming into production as well as continuous policy interventions from the government, the Zimbabwe Independent can reveal.
The country’s gold deliveries to the FGR have continued to soar with the government’s sole licenced buyer in Zimbabwe indicating that maturing projects by large-scale mines contributed significantly to additional receipts in 2022.
The FGR is, however, expecting their deliveries to increase this year to reach 40 tonnes.
Responding to inquiries by the Independent this week, FGR general manager Peter Magaramombe said the company received 35 tonnes of gold in 2022, an increase of 18,9% from the same period in 2021.
“We have projected the gold deliveries in 2023 to reach 40 000 kg, an increase of 4 700 kg or 13,4% on 2022 gold deliveries,” Magaramombe said.
He said the increase in deliveries would be anchored by the expansion programme where additional gold buying centres will be opened in active regions to widen the existing catchment area while providing convenience to producers within targeted regions.
“FGR will continue to provide a competitive pricing framework benchmarked to the London Bullion Market Association (LBMA) prices at a discount of 5%,” Magaramombe said.
He further indicated that the FGR will continue to offer United States dollar (USD) spot cash payments for gold lodgements to ensure that small-scale gold producers are not constrained.
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“FGR will maintain the low-cost revolving fund targeting viable small-to-medium projects constrained by the unavailability of relevant lines of credit from traditional banks,” he said.
This, Magaramombe said, would be achieved through the Gold Initiative Fund (GDIF).
Authorities have been battling to attract small-scale miners to deliver their gold directly to the Reserve Bank of Zimbabwe (RBZ) through the FGR although there are reports of leakages affecting receipts.
Government has, however, enhanced incentive provisions for the gold miners to attract more deliveries.
In 2021, gold miners delivered 29 664kg, increasing the deliveries in 2022 by 5 616kg with a total of 35 280kg delivered during the year.
“The highest gold receipts were experienced during the third quarter of 2022 (9 680kg) and fourth quarter (9 618kg). This and the general surge in gold receipts could be attributed to several factors.
“The accessibility of working areas (shafts) by small-scale miners as the water table lowers during the third and fourth quarters. The incidence of maturing projects for large scale mines having the effect of new additional gold receipts by FGR,” Magaramombe said.
He also attributed the increases in deliveries to obtaining incentive programmes across the board during the year for having the effect of making the FGR platform more attractive.
According to Magaramombe, gold deliveries in the first and second quarters of 2022 stood at 7 695kg and 8 278kg before an increase later in the year.
He, however, said the first two quarters of each year were traditionally associated with low gold receipts, especially from small-scale miners owing to rising water tables in active areas limiting the access to payable working areas.
The country is endowed with vast gold deposits which remain unexploited
Smuggling has remained a major challenge as tonnes of the precious metal are salted away day and night.
Home Affairs and Cultural Heritage minister Kazembe Kazembe in September 2020 revealed that Zimbabwe was losing at least US$100 million worth of gold every month.
There are over 4 000 recorded gold deposits in Zimbabwe of which nearly all of them are located in ancient workings. The country remains under-explored to discover deposits away from these ancient workings.
More than 90% of gold deposits in Zimbabwe are associated with greenstone belts which are some of the richest in the world.
Other gold deposits occur in the Limpopo Mobile Belt in the south of the country and the Proterozoic Piriwiri rocks in the North-Western part of Zimbabwe.