Statistics released by the central bank showed that gold delivered to Fidelity Printers and Refiners was 55% up last year to 29.6 tonnes from 19.05 tonnes in 2020 on the back of timeous payments and incentives given to yellow metal producers.
This is the second highest output after the 34.4 tonnes delivered in 2018 signalling that the golden times could be back for the yellow metal.
Gold is the third largest foreign currency earner after platinum and diaspora remittances.
However, authorities have in the past given gold producers a short end of the stick with payments coming more than two weeks after deliveries and the yellow metal being sold at prices lower than those prevailing on the international market.
That has since been resolved resulting in a surge in deliveries to official channels.
The Ministry of Mines and Mining Development is targeting a US$12bn mining industry by 2023. Gold is expected to contribute US$4bn on the back of a favourable investment climate.
While authorities could be popping champagne bottles after a stellar year, more work needs to be done for the 100 tonnes target to be met by 2023.
Small scale miners have complained of taxes which they say inhibit production. They say the Zimbabwe Revenue Authority should not be tough on them to drive formalisation.
They say these obstacles have seen gold being sold on informal channels.
The small-scale miners also require support to buy equipment and boost production.
There have been concerns over the myriad of taxes which has seen small scale miners evading formal channels.
It is estimated 3 tonnes of gold is sold through the informal channels monthly.
Large scale miners want authorities to increase the forex retention threshold to 80% from 60%.
A State of the Mining Industry Report showed that miners are unhappy with the 60% foreign currency retention.
The executives said the 60% retention was inadequate to meet their operational requirements.
They said the retention was under pressure from requirements to pay royalties, electricity bills, taxes and some statutory obligations in foreign currency as well as widespread preference for US$ by suppliers.
The primary producers say they are losing 20% of their revenue due to the disparity between formal and informal exchange rate. While the dollar traded at ZWL$112.228 at the foreign currency auction system on Tuesday, it is ZWL$220 on the thriving parallel market.
They say if the authorities do not increase the threshold to 80%, the 40% they liquidate should be able to settle statutory obligations and payment of electricity tariff.
The mining sector is one of the anchors of the Zimbabwe economy. Its contribution to GDP reached 11.8% in 2020 from 6.5% in 2016. The sector was projected to contribute 11.3% to GDP last year.
The sector’s contribution to export receipts was projected at 77% last year from 64% in 2016.
Indications are that the yellow metal is on the rebound. However, the growth in output requires that monetary and fiscal authorities have to put in place policies that encourage deliveries via formal channels. Gold is one of the most liquid commodities.
