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Ishemunyoro Chingwere
Business Reporter
Gold deliveries to Fidelity Printers and Refineries (FPR) declined 43 percent in October compared to the same period last year as production plunged due to lock-downs imposed by many jurisdictions to curb the spread of Covid-19.
The travel restrictions curtailed movement of consumables and hard cash, major components needed to ramp up production. FPR this October received 1 367 tonnes of gold compared to 2 402 tonnes in the same month last year.
Small-scale miners, for long suspected to be suppliers of the yellow metal to smuggling rackets, registered a sharp decline in their deliveries by 69,3 percent as they delivered just 473kg down from 1 544 tonnes in the same month last year.
On the other hand, primary producers’ showing was largely unchanged with a marginal increase to 894, 7kg compared to 858kg in the same month last year.
The struggles in the gold sector are in sharp contrast with the rest of the mineral basket, whose marketing falls under the ambit of the Minerals and Marketing Corporation of Zimbabwe (MMCZ), which continues on a positive trajectory despite apparent challenges.
The first nine months of the year saw minerals under the MMCZ basket registering US$1, 7 billion, a figure that is 24 percent above set target. FPR general manager Fredrick Kunaka, conceded deliveries have not been forthcoming as much as the State buyer would have anticipated, especially on the back of a drive by Government targeting to grow deliveries to at least 100 tonnes per year from 2023 onwards.
He, however, attributed the lacklustre performance to, among other challenges, the effects of Covid-19 that saw every country across the world restricting business operations to slow the spread of the virus. Earlier in the year, FPR faced cash shortages and thus struggled to settle deliveries timeously due to travel restrictions occasioned by Covid-19 mitigatory measures that disrupted air travel.
“Deliveries this year have not been as expected because the year has been marked with unprecedented setbacks,” said Mr Kunaka.
“We have had to work around the restrictions imposed by the Covid-19 pandemic, which have hampered most of our operations, thus the noticeable decline in gold deliveries. It must be noted that the Covid-19 restrictions affected movement of mining inputs thus causing the decline in the gold deliveries. The impacts of the lock-downs will continue to be felt up to end of year with a possibility of extending further given the reported second round of infections. As long as Covid-19 is upon us, the gold deliveries will likely not show any meaningful increase since we do not locally produce the mining inputs or the cash required to pay for the gold delivered by small scale miners,” he said.
Home Affairs and Cultural Heritage Minister Kazembe, has previously indicated that up to US$100 million worth of gold is being smuggled out of the country every month.
Finance and Economic Development Minister Mthuli Ncube, has suggested that most of this gold is ending up in South Africa and Dubai.
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