FIDELITY Printers and Refiners (FPR) has recorded a decline of 40.6% in gold deliveries, Reserve Bank of Zimbabwe (RBZ) John Mangudya said in his Mid-Term Monetary Policy Review.
In the review, gold deliveries to FPR in the period January to June 2019 stood at 12,3 tonnes, representing a 40.6% decline compared to 17.3 tonnes that were delivered during the same period last year.
The decline is mainly due to fugitive exchange rates, pricing and payment issues.“Gold deliveries to Fidelity Printers and Refiners stood at 12.3 tonnes for the period January to June 2019. This was a 40.6% decline compared to 17.3 tonnes that were delivered during the comparative period in 2018.
“Exchange rate, pricing and payment issues which partly accounted for the decline have, however, been largely resolved through the recent monetary policy means,” Mungudya said.
Despite facing a plethora of challenges, small-scale miners contributed more than 60% total deliveries.
“It is, however, pleasing to note that small-scale producers, despite facing a lot of challenges, continued to dominate the country’s gold deliveries, accounting for more than 60% of the total deliveries,” he added.
In an interview with Zim Morning Post, Zimbabwe Prospectors Association (ZPA) president Samson Dzingwe said issues of pricing and rates were behind the decline.
Currently, gold producers retain 55% of the price of gold delivered in their Foreign Currency Accounts (FCAs) and the balance of 45% of the purchase price is paid in Zimdollars at the existing interbank exchange rate.
“The trend that small-scale miners contribute more to total deliveries will never change but production does, and it will continue to decline because rates at 55:45 are not bearable.
“Miners cannot buy explosives with EcoCash and as a result they will sell gold to the black-market where they are given 100% cash in US$,” Dzingwe said.
Reports in our possession claim that the Mines ministry has been holding the gold sector to ransom by failing to expeditiously resolve conflicts bedevilling small-scale miners, leading to underproduction of gold in the country.
President Emmerson Mnangagwa has said the mining sector, together with other key sectors such as agriculture and tourism, should play an integral part towards the attainment of Vision 2030, with mining alone expected to generate US$12 billion worth of exports annually.
Mines minister Winston Chitando is on record saying government was working on a three-pronged approach to ensure that it gets to 100 tonnes of gold annually within the next five years.