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Oliver Kazunga Acting Business Editor
FIDELITY Printers and Refiners is set to apply for re-admission into the London Bullion Marketers Association (LBMA) once it refines gold exceeding 10 tonnes annually, Reserve Bank of Zimbabwe acting governor Dr Charity Dhliwayo has said.The country was suspended from the LBMA a few years ago when gold produced in the country plummeted to less than 10 tonnes per year due to a number of factors in the mining sector.
“Fidelity Printers and Refiners will apply for accreditation to the LBMA once they refine gold in excess of 10 tonnes per annum.
“Notably, the framework would pave way for the country to directly export refined gold to the international market, build gold reserve buffers as well as resuscitate the domestic jewellery industry,” she said while presenting the 2014 monetary policy statement on Wednesday.
She said prior to 2006, gold produced by small-scale and large scale-miners exceeded 15 tonnes adding that during that time Fidelity Printers and Refiners was the sole buyer and refiner of gold and an accredited member of the LBMA.
She said this was largely so, as the gold output realised by the country exceeded the 10 tonnes annual threshold required to maintain membership with the London Bullion Marketers Association.
“Under this arrangement, gold produced and refined in the country was directly exported at the international gold prices obtaining at the LBMA, without any middlemen or intermediary.”
She said in light of the general contraction in economic activity, gold output declined to levels below 10 tonnes in 2007 resulting in the country not being able to maintain its position as a member of the LBMA and Zimbabwe exported the yellow metal through South Africa for refining.
Dr Dhliwayo added that they were working on modalities of entering into hedging arrangements, which would ensure that they buy gold at favourable prices even during times when the price of gold was declining. And to ensure access by small-scale miners (including artisanal miners) to the market as well as reducing vulnerability of the miners to robbers, Fidelity has established buying centres at ZB Bank branches in Harare, Bulawayo, Kadoma, Kwekwe, Gweru, Gwanda, Filabusi, Zvishavane, Masvingo and Mutare.
“In order to increase geographical coverage, new buying centres will be opened. Fidelity Printers and Refiners is also in the process of establishing other gold buying centres in addition to the ones mentioned in the foregoing so that all the gold producing areas of the country are covered.
“Additionally, the Reserve Bank will also issue detailed operational modalities on how Fidelity will execute its role as the sole buyer and exporter of gold,” she said.
She said small-scale producers would immensely benefit from being paid the ruling international gold price which is transparent.
“These new measures that enable Fidelity Printers and Refiners to buy and refine gold from all miners neatly dovetail into value addition initiatives as encapsulated in Zim-Asset.”
Dr Dhliwayo said to ensure the country benefits from enhanced gold production through the empowerment of the small-scale sector, there was a need to provide facilities to fund their mining activities.
It is also hoped that measures to monitor the buying of gold operations would be implemented in line with the newly introduced gold marketing framework. Such measures include ensuring that all small-scale gold producers in Zimbabwe, as well as custom millers who will be selling gold to Fidelity Printers and Refiners shall register with Fidelity.
Custom Millers will continue to submit monthly performance reports, detailing production and sales statistics, to the Ministry of Mines and Mining Development and will now be required to submit the same reports to the Reserve Bank and Fidelity Printers and Refiners.
“Additionally, gold buying agents shall be required to report to Fidelity any unlicensed gold buyer who may be buying gold illegally in their catchment areas,” said Dr Dhliwayo.
Online Reporter