Jewellery industry faces collapse

to buy gold from one expensive source.
According to the Gold Trade Act, registered jewellers can only buy gold from the Reserve Bank of Zimbabwe’s gold-buying division, Fidelity Printers and Refiners.
The Jewellery Council of Zimbabwe said gold from Fidelity Printers and Refiners was expensive and the sector wanted to be allowed to buy from alternative cheaper suppliers.
The council said at least 80 percent of the country’s jewellery companies had closed shop because they could not afford gold from Fidelity.
The council’s chairman, Mr Fidelis Dhana, said the current law had to be reviewed to save the remaining players.
“We are buying gold at world market prices from Fidelity, which is not sustainable.”
“The world market price is not wholesale which has made it difficult for us to manufacture and sell at a profit,” he said.
Mr Dhana said existing players were operating below 10 percent capacity utilisation.
“The majority have shut down, they have no raw materials because they just do not have the money to buy the gold,” he said.
For competitiveness, he said, “Government has to allow players to buy gold directly from miners, the norm in other countries”.
Mr Dhana said in the interim, operators were depending on scrap gold.
“We are using recycled gold while survival for some is now hinged on conducting repairs,” he said.
The number of jewellery firms, Mr Dhana said, had dropped to between 55 and 60 from about 5 000 in the past decade. – New Ziana.