Timothy
Business Writer
Gold production in the country jumped 55,5 percent to 29,6 tonnes in 2021 a development that could help the country stabilise its currency.
The country is struggling with foreign currency shortages as private forex earners seem not willing to sell at the Reserve Bank of Zimbabwe-managed Foreign Currency Auction System (forex auction).
Deposits in Foreign Currency Accounts (FCA) breached the US$1.85 billion mark in October last year but the country continued to struggle with the exchange rate continuously depreciating against other major currencies.
Last year the Zimbabwe dollar shed approximately 7 percent on the official forex auction but fared even worse on the parallel market where it tumbled by approximately 50 percent.
Officially the Zimbabwe dollar trades at $108.6660:US$1 but changes hands at between $200-Z$220:US$1 on the parallel market.
Increased gold production will however go a long way in boosting the country’s foreign currency coffers as the precious metal is sold via sole buyer and RBZ owned Fidelity Gold Refinery (FGR).
According to the RBZ, in a statement released on Wednesday, small and large gold producers delivered a total of 29.6 tonnes of gold to FGR in 2021, a 55,5 percent increase from the 19 tonnes delivered in 2020.
Large gold producers delivered 11 tonnes to FGR in 2021 whilst small-scale producers contributed 18.5 tonnes.
The central bank commended Government for the Gold Incentive Scheme introduced in May 2021, which scheme, it said, had a significant positive impact on gold deliveries to FGR.
Before the incentives, a significant amount of the country’s gold was smuggled out of the country.
The smuggling of gold, Zimbabwe’s top foreign currency earner, is estimated to cost the country US$1.5 billion (over R21 billion) in lost revenue per year, according to the International Crisis Group (ICG).
ICG said most of the precious metal is siphoned off by informal small-scale miners who sell their findings to illicit gold traders rather than government-appointed officials.
In June last year FGR, then Fidelity Printers and Refiners (FPR), announced the country had lost around 11 tons of gold to “leakages” in 2020.
The losses were mainly due to payment delays caused by foreign currency shortages that encouraged miners to sell to smugglers instead, FPR’s head of gold operations, Mehluleli Dube, told a parliamentary mining committee.
“We have since put some measures in place, and export incentives to encourage our miners to deliver as much gold as possible,” he said.
The measures seem to have worked.
“It is projected that the quantum of the country’s gold exports in 2021 will increase beyond the 29 629.61 kg when the gold component in the Platinum Group Metals is eventually included in the tally of gold deliveries to FGR,” reads part of the statement from the central bank.
Bongani Ndlovu