RBZ clears arrears to gold producers

Golden Sibanda Senior Business Reporter
The Reserve Bank of Zimbabwe (RBZ) has cleared all outstanding payments to gold mining companies for bullion deliveries to Fidelity Printers and Refiners (FPR); the country’s sole authorised gold buyer.

Captains of industry in the mining sector, especially large-scale producers, said yesterday the clearance of the arrears for deliveries to the apex bank’s gold buying unit would boost production going forward.

This also comes as Government has deployed officials across all provinces to boost deliveries to FPR after bullion output in the first three months of this year tapered off amid reservations by small miners over prices.

Deliveries in the first three months of the year totalled 6,5 tonnes down from 7,3 tonnes delivered in the same time last year with small-scale miners accounting for 65 percent of the gold haul.

Delays by FPR in making payments in respect of deliveries resulted in some miners, including RioZim, scaling down production, or suspending mining activities altogether due to forex shortages.

In fact, Zimbabwe Stock Exchange listed RioZim halted mining operations for the second time within six months at three of its gold mines; Renco, Dalny and Cam and Motor, citing non-payment for gold deliveries.

Gold miners that were severely affected by delayed payments of the foreign currency component of proceeds from their gold deliveries faced challenges paying for critical imports to sustain their operations.

Concerns had begun to build that delayed payments coupled with misgivings over the 55 percent foreign currency retention threshold could jeopardise the output target of 40 tonnes for 2019.

Without gold, Zimbabwe would struggle to meet its critical external payment obligations for essentials such as fuel and medicines given poor export performance of other key sectors.

Chamber of Mines of Zimbabwe (CoMZ) chief executive Isaac Kwesu said yesterday that all outstanding payments had been cleared, as the bank sought to shore up bullion deliveries, which took a 10 percent deep in the first quarter of this year.

“All outstanding payments have been cleared
and payments are now coming timeously except in one or two instances when payments may be delayed by a week
at most, but most of the previous challenges were resolved.

“There were huge amounts of outstanding payments; some for as long as six months, but they have all been cleared. The only issue the miners want to discuss with the central bank is the issue of (forex) retention thresholds, which we want the bank to review,” Mr Kwesu said.

President Mnangagwa’s administration has set a target of US$12 billion export earnings for the mining sector by 2023, as part of the sector’s contribution towards middle-income status by 2030, with gold mining expected to play a major role in the production quantum leap.

The CoMZ chief executive would, however, not go into details in terms of the threshold the mining companies were seeking from the current 55 percent they are allowed to retain on the proceeds of their deliveries.

Manufacturers retain 80 percent of their proceeds; gold producers 55 percent; other minerals 50 percent; tobacco and cotton merchants, for input schemes 80 percent; tobacco growers; 50 percent, cotton growers; 30 percent while horticulture, transport, and tourism will retain 80 percent.

Gold is a strategic mineral in Zimbabwe since the precious mineral is now the country’s single foreign currency earner, generating over 60 percent of the country’s export earnings together with platinum group metals.

This function has been disabled for Zimbabwe Today.