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Ishemunyoro Chingwere
Business Reporter
Small scale miners, the country’s largest gold producers, have described the new payment regime adopted by Fidelity Printers and Refineries (FPR) as a welcome development that can finally eliminate the alternative market.
FPR last week announced a new gold payment regime which will see the exclusive State gold buyer and marketer paying US$52 per gram, up from US$45.
Most importantly, the new arrangement will now see prices being periodically changed in line with global market prices.
The new strategy is largely aimed at curbing market inefficiencies that have largely been the boon for the parallel market.
It is against this background that the Zimbabwe Miners Federation (ZMF) who have previously pointed to formal market’s deficiencies as an enabler of the parallel market lauding the new arrangement as progressive.
Small scale miners, who are represented by ZMF, account for over 60 percent of the country’s gold deliveries.
“The gold market is very fluid, you can’t have fixed prices in this industry,” said ZMF president Ms Henrietta Rushwaya.
“There was a time when the global prices and consequently the black market rate shot up way above Fidelity’s.
“So we welcome the new prices and new strategy because this method is sensitive to the world pricing and with it we will start to see the erosion of the black market,” she said.
Ms Rushwaya said although the black market rate, which is said to be at US$53 per gram, is still higher than the official rate — the former’s lure has been wiped as FPR is offering almost the same amount.
She also reiterated that as the Government streamlines the industry, there is need to make sure that the industry prioritises the participation of locals as it is considered a low hanging fruit.
Gold is central to the Government’s mining strategy as it is primed to contribute the largest chunk in the US$12 billion milestone for 2023. The Government expects the yellow metal to contribute US$4 billion to the 2023 milestone.
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