RBZ adds US$20m to gold facility

Livingstone Marufu Business Reporter
THE Reserve Bank of Zimbabwe has doubled its small-scale gold support facility to US$40 million to help the sector reach the 28-tonne target for 2017.

This year, small-scale producers are angling to deliver more than 10 tonnes of gold.

RBZ Governor Dr John Mangudya told The Sunday Mail Business last week that, “We are enhancing the gold support facility for small to medium scale producers from US$20 million to US$40 million.

“This facility is being enhanced on account of the importance of the gold sector to the Zimbabwean economy and the fact that the Bank is pleased by the current utilisation of the existing facility which stands at US$12,5 million.

“Thus, this measure, together with the five percent export incentive scheme and the positive effect of compliance monitoring by the Gold Monitoring Committee, is designed to increase gold production.”

He said the five percent export incentive and the positive impact of the Gold Monitoring Committee had lifted exports of the yellow metal.

Although last year’s 23-tonne gold output was just below the projected 24 tonnes, export earnings for the sector topped US$1billion.

The central bank believes that given the improved operating environment in 2017, small-scale producers will surpass 10 tonnes in 2017 from 9,7 tonnes last year.

Last year’s performance represented remarkable growth in deliveries by artisanal miners from 7,5 tonnes in 2015.

The gold support facility is revolving fund supported by gold sales and Government is working on additional incentives that include scrapping royalties.

Fidelity Printers and Refiners (FPR) — the RBZ’s gold-buying unit — has bought six vehicles to collect gold from miners in remote areas like Mudzi and Mutawatawa in Mashonaland East province.

FPR has also scrapped its five-gramme minimum and now buys any quantity of gold.

As the apex bank pushes for decriminalisation of the gold trade, it is also encouraging small-scale miners to open bank accounts that can be used to track performance for future funding initiatives.

Fluid and Power Technologies MD Mr Shephard Kembo said last week the carrot approach by the central bank would resonate with small-scale producers.

“What the RBZ is doing is a smart of way of killing two birds with one stone: incentivising the producer to increase output while at the same time coaxing them to formalise their operations. This couldn’t have happened at a better time. Formalising businesses naturally helps to boost he mainstream economy,” said Mr Kembo.

Gold accounted for 47 percent of mineral exports in 2016, up from 40 percent in 2015.

The country’s primary large-scale gold producers accounted for 55 percent of gold output in 2016, the same as 2015; while the contribution of small-scale producers increased from 36 percent in 2015 to 40 percent in 2016.

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