adminrecapitalisation will see Government selling some of its shares in Fidelity and will also seek lines of credit, Minister Biti told journalists as he presented the State of the Economy Report for the first quarter.
Government owns Fidelity 100 percent through the Reserve Bank of Zimbabwe.
“What Government is working on right now is to recapitalise Fidelity so that all gold mined in Zimbabwe is refined at Fidelity before it is exported,” said Minister Biti.
“So, US$50 million is sufficient” he said. “We are talking to local and foreign investors over recapitalisation.
“We are not just looking at lines of credit but we are also prepared to give them equity.”
Fidelity lost its status as the country’s sole gold buyer when the central bank liberalised the marketing and trade of gold in 2009 to boost the sector.
At that time, most miners had stopped production after Fidelity failed to pay for gold deliveries. Some gold firms are still owed huge amounts.
Zimbabwe’s gold output fell to an all-time low of 4,2 tonnes in 2008, compared with a record high of 29 tonnes 10 years earlier when the country went through successive recessions characterised by hyperinflation.
The investment returned following the liberalisation of the gold sector and after the dollarisation of the economy.
But it has slowed down on indigenisation and empowerment concerns, which require foreign-owned companies to sell their majority stakes to indigenous Zimbabweans.
In the three months to March this year, gold production was 3,1 tonnes worth US$150 million and this is consistent with benchmarking for achieving the annual 15 tonnes target.
This would enable the country to be re-admitted onto the London Bullion Market, said Minister Biti.
He said Fidelity would require at least US$12 million to buy gold from miners. Gold mines are collectively producing an average 1 100kg per month.
Online Reporter