More US dollars for gold miners

Elliot Ziwira Senior Reporter
Gold miners will now get 70 percent of their sales in US dollars, up from 50 percent, while small-scale and artisanal miners will be paid a flat rate of US$45 per gramme.

All gold mined or panned in Zimbabwe must be sold to Fidelity Printers and Refiners, owned by the Reserve Bank of Zimbabwe and designated by the central bank to buy gold from large scale producers, small scale producers and holders of gold buying permits.

In a statement yesterday, Fidelity Printers and Refiners general manager Mr Fradreck Kunaka said the 70 percent foreign currency component will be paid into producers’ nostro accounts, and the 30 percent balance will be paid in local currency through their bank accounts.

The new framework that comes into effect today, replaces the old regime in which gold miners were paid 50 percent of their sales in foreign currency, and the balance settled in local currency, thus affording the Reserve Bank of Zimbabwe leeway to meet critical national obligations.

This comes amid revelations that Fidelity is failing to pay small-scale gold producers on time due to Covid-19 restrictions that have not spared global airlines.

Consequently, flights have been limited, impacting on the smooth importation of foreign currency required to honour obligations with clients.

The novel structure also entails large gold buying agents seeking a Fidelity agency permit to have a mining operation producing a minimum of 50 kilogrammes of fine gold per month.

On the other hand, the statement reads, small-scale gold buying agents are required to partner Fidelity in an agency agreement that clearly spells out the terms and conditions under which they would operate.

Fidelity is also stepping up efforts to ensure that all gold is in fact sold legally, and the statement called on gold buying agents to regularise their operations in compliance with the new trading structure.

In Zimbabwe, the artisanal and small-scale mining sector has been a major contributor to the total gold output.

According to Fidelity Printers and Refiners, the sector accounted for 22 of the 34 tonnes of gold produced in 2018, representing a 64,7 percent contribution. Gold exports contributed US$1,33 billion in the same year. The country targets 35 tonnes of production this year, against the 2019 figure of 27 tonnes, which saw total earnings from gold drop to US$946 million.

In line with the national Vision 2030, Zimbabwe targets to hit 100-tonne gold production by 2023, and achieve the country’s mission to have a stable and sustainable US$12 billion mining industry by the same year.