Gold deliveries down 31%


Zimbabwe’s gold deliveries fell 31 % to 1.46 tonnes in April 2020
from 2.12 tonnes in April 2019 due bottlenecks in imports caused by a global lockdown as goverments moved to combat the spread
of coronavirus.

This is the third month running that gold deliveries have been on a downward spiral after the yellow metal has been on the surge from October last year to January this year.

Government has increased fuel allocations to gold miners from last year but the lockdown and the effects of coronavirus have thwarted miners to get useful consumables from China. Experts say gold mining especially (small scale) was greatly affected by lockdown regulations as social distancing needs to be observed.

The yellow metal is now the highest forex earner and contributes 38% of the country’s total earnings and more than 60% to the mining sector which is the highest forex earning sector in the country.
Fidelity Printers and Refiners (FPR) general manager Fradreck Kunaka told Business Times that secondary producers have struggled to work under the Covid-19 regulations as most artisanal miners do not have letters to show to the authorities.

“In April 2020, gold deliveries have gone 31% down to 1.46 tonnes in March 2020 from 2.12tonnes in April 2019 due to the COVID 19 pandemic which had already started affecting the countries from which mining chemicals
such as cyanide are sourced thus negatively affecting operations of various mines.

“By reduced production in countries such as China and South Korea, downstream users of which we are, also began to feel the negative effects. Movement of chemical consignments from the said countries was affected as early as February 2020 thus the ripple effects started to be felt in
March 2020 going forward,” Kunaka said.

Small scale miners extracted 0.728 tonnes and primary producers at 0.735 tonnes.

This is the second time that the primary producers have outperformed the secondary producers. Gold deliveries have surged 44% to 2.54

tonnes during the month of January from 1.77 tonnes during the same period last year due to increased fuel allocations to miners.

In February gold deliveries fell 34% to 1.403 tonnes in February 2020 from 2.136 tonnes during the same period in 2019.
Zimbabwe’s gold deliveries fell 32 % to 1.77 tonnes in March 2020 from 2.61tonnes in March 2019.

Cumulatively, gold deliveries have plunged 17% to 7.18 tonnes in the first four months of 2020 from 8.63 tonnes extracted during the same period
in 2019.

In December 2019, yellow metal was up 72% to 2, 77 tonnes from 1, 6 tonnes during the same period in 2018.
Cumulative gold deliveries fell 16% to 27,6 tonnes in 2019 from 33,2 tonnes in 2018 due to suspected smuggling and hostile mining policies.
Mines and Mining Development minister Winston Chitando said Covid-19 has affected the operations and a plan needs to be worked out to
ensure miners recover from the big slump.

Last year gold export receipts, slumped 28% to US$946m in 2019 from
US$1,33bn in 2018, leaving the country with no alternatives for foreign currency as the second highest forex earner tobacco also tumbled
7% to US$846.7m from US$907.8m due to prolonged droughts and unfavourable payment policies.

In 2019, gold deliveries have gone down since the beginning of the year due to foreign currency shortages, crippling power outages and poor
mining policies. Since 2017, the country has been grappling with foreign
currency shortages, inefficient mining and processing technologies but the reduction of the forex retention levels by the Reserve Bank of Zimbabwe is believed to have impacted negatively on the deliveries.

This has created arbitrage opportunities for miners to smuggle gold outside the country’s borders.
Over 34 tonnes are believed to have been smuggled out of Zimbabwe. Gold Miners Association of Zimbabwe chief executive Irvine Chinyenze
said Covid-19 has negatively impacted on the drop of gold figures due to restrictions on the movements of small scale miners.

“By far Covid-19 has negatively affected our operations as small scale miners as most of our people were restricted to go to mines due to the ongoing restrictions.

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