Gold delivery declines 10 percent

Ishemunyoro Chingwere Business Reporter
Gold deliveries in the first quarter of the year to State gold buying entity, Fidelity Printers and Refineries (FPR), took a 10 percent knock compared to the same period last year, statistics availed to The Herald Business have shown.

Deliveries in the first three months of the year totalled 6,5 tonnes down from 7,3 tonnes delivered same time last year.

The decline could dent the state buyer’s 2019 target of a record 40 tonnes, which was set on the back of record breaking deliveries of 33,2 tonnes last year.

Of note, on the first quarter statistics, is the continued dominance of small scale miners over their primary producer with 64,6 percent of the deliveries having come from the former most of whom rely on rudimentary mining methods.

An official at FPR who declined to be named, said there might not be any need to start pressing panic buttons over the decline as deliveries are largely expected to surge in the second quarter and the rest of the year.

The official said the marked plunge, particularly for primary producers, was a result of the discord that existed in the country’s monetary system that had the US dollar pegged at par with the RTGS dollar before the Reserve Bank corrected the anomaly when presenting the 2019 Monetary Policy Statement.

“There is no need to panic at all,” said the official, “the decline is a consequence of the ‘1:1’ exchange rate, which we used to insist on before the RBZ corrected it through the introduction of the interbank exchange rate.

“What was happening prior to the interbank exchange is that ‘1:1’ was discouraging production in that companies that are exporting were losing value when they got part of their payments in the local component at an unsustainable rate.

“So now that has been corrected and as you would know the mining sector has welcomed it, you will begin to see more and more production which will translate to more deliveries at Fidelity,” said the official.

Gold is one of the key metals expected to play a key role towards Vision 2030 which President Mnangagwa has set for Zimbabwe to become an upper middle income status. Mines and Mining Development Minister Winston Chitando is on record saying Government envisages a situation where the country’s gold deliveries should reach 100 tonnes per year by 2023, which should then anchor the total annual mineral exports worthy at least US$12 billion.

Last year the country earned about US$2 billion from mineral exports alone.

Commenting on the statistics, newly formed small scale miners’ representative body – the Zimbabwe Artisanal and Small Scale Miners’ Federation (ZASMF) – said this is further evidence that Government needs to do more to protect and boost the sector that is performing.

“The evidence is there for everybody to see the important role that our sector is playing towards the country’s gold output,” said ZASMF interim president Ms Henrietta Rushwaya. “While we appreciate Government efforts in capacitating our sector, I think this performance calls for speed in making sure that the problems inhibiting us are addressed so that we can start moving towards the 100 tonnes that Government has set for Vision 2030,” she said.

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