Gold deliveries decline

Dumisani Nsingo, Senior Business Reporter
GOLD deliveries to Fidelity Printers and Refiners (FPR) fell by more than 12 percent in the first quarter of this year compared to the same period last year owing to numerous challenges bedevilling the sector.

According to statistics obtained from FPR 6,5 tonnes of gold were delivered in the months of January to March in 2019 while 5,7 tonnes has been collected in the same period this year, a decrease of 801 kilogrammes, which translate to 12,29 percent decline.

In the month of March last year 2,6 tonnes of the yellow metal were delivered to the country’s sole buyer and exporter while 1,7 tonnes were delivered this year in the same month, a shortfall of 846kgs. FPR general manager Fradreck Kunaka largely attributed the decline in deliveries to rampant power outages and inefficient mining technologies by most small-scale miners.

“The gold deliveries recorded declined because of a number of factors, which have had a negative bearing in the previous months which are power outages, inefficient mining and processing technologies in use, inappropriate mining methodologies especially at a time when most mines have deepened beyond 30 metres and inappropriate ore hoisting machinery from the deep mine shafts,” he said.

Further stating that: “the trend is usually synonymous with the rainy season as most artisanal and small-scale mines are not properly equipped to deal with rain seepage.”

Small-scale and artisanal miners have contributed at least 60 percent of the gold deliveries since 2016. Gold is Zimbabwe’s anchor export product having accounted for $1,2 billion in annual forex receipts in 2018 translating close to a third of total export earnings.

The sector’s performance is therefore pivotal in stabilisation of the economy especially on the monetary side, given that the economy is a net importer. However, gold exports fell from an all-time high of 33,2 tonnes recorded in 2018 to 27,6 tonnes in 2019. The trend is expected to continue in 2020 as smuggling channels to South Africa continue to see more supplies from disgruntled miners.

However, the Government has pointed out that the country is losing at least 34 tonnes of gold worth close to US$2 billion every year due to smuggling. Zimbabwe Miners Federation spokesperson Mr Dosman Mangisi also reiterated Mr Kunaka’s sentiment stating that a number of factors were curtailing production subsequently leading to low deliveries in the first quarter of the year.

“The first quarter of 2020 witnessed a number of issues, with machete wielding gangs robbing a number of small-scale miners of their gold, fuel and power unavailability and most importantly the buying price of gold. There is a rapid erosion in the value of the local currency, largely driven by a dearth in value of forex in the informal market and with gold whose retention levels are pegged at 55:45, some miners are obviously channelling their gold to informal markets,” he said.