The value of Zimbabwe’s gold export receipts jumped by more than half to US$97.06m in April 2021 from US$63.42m reported in the same period last year due to improved bullion deliveries and firming prices on the international market, Business Times can report.
The relaxation of the Covid-19-induced lockdown and the end of the rainy season also contributed to an improved performance.
Prices of the yellow metal on the international market have increased to about US$57,000 a kilogramme from US$55,000 in January and February this year.
In written responses, Reserve Bank of Zimbabwe governor John Mangudya told Business Times that gold receipts improved last month.
“The country made total gold shipments of US$97.06m in April 2021 from US$63.42m earned during the same period last year.
From February this year the country’s gold export earnings have improved on a monthly basis due to the firming of the bullion prices on the international market,” Mangudya said.
He said the increase in gold export shipments was due to an improvement in gold deliveries to Fidelity Printers and Refiners as a result of slowing down of rains.
Gold export receipts in January 2021 were at US$53.1m from US$98.1m during the same month last year on subdued deliveries due to Covid-19 effects, heavy rains that the country has experienced in January and the failure to remove costs on small scale gold miners.
In February this year the country shipped out gold worth US$66.1m compared to gold shipments worth US$56.1m in the same period last year while in March 2021 gold export receipts reached US$81.2m compared to US$71.9m recorded in the same month in 2020.
Overall, gold export earnings went 3% up to record US$297.46m during the first four months of the year against US$289.52m recorded during the same period last year.
Gold deliveries have bounced back for the first time in March 2021 after recording a positive improvement of 2% to reach 1.80 tonnes from 1.77 tonnes recorded during the same period last year due to the slowing down of the rains in the period under review.
Zimbabwe is losing between US$1.2bn and US$1.7bn yearly due to smuggling and unfriendly policies such as high taxes, costs and low retention levels which do not allow miners to produce at a competitive level.
Small scale producers’ subdued performances have caused a general decline in gold output in the past year with the primary producers maintaining the same output over the years.
Ironically, small scale miners are getting 100% forex retention threshold while large scale are getting 60%.
During the first quarter of 2021, total gold deliveries fell 31% to 3.977 tonnes from the 5.72 tonnes achieved in the same period last year.
From the 3.97 tonnes, small scale miners delivered 1.58 tonnes against 2.39 tonnes by primary producers.
Recently, Fidelity Printers and Refiners (FPR) general manager Fradreck Kunaka revealed that the country could be losing over 30 tonnes yearly valued at US$1.7bn due to smuggling and unfavourable mining policies.
He said the country should totally liberalise the gold sector to combat smuggling and compete at the highest level with foreign gold buyers.
Gold Miners Association of Zimbabwe chief executive officer Irvine Chinyenze believes the country could earn more if fundamentals are addressed.
“For now figures are okay but if challenges are addressed more gold would come through formal channels which would enable the country to earn more foreign currency from its most prized resource,” Chinyenze said.
The country’s gold output plummeted 31% to record 19.052 tonnes during 2020 from 27.66 tonnes recorded during 2019 due to Covid-19 effects, delay in payments and low foreign currency retention levels.
A recent mining report advised that President Emmerson Mnangagwa’s government should pay gold producers at world prices to woo them into selling the yellow metal through the formal channels.
The report blamed FPR’s flawed centralised gold buying scheme and called for the law to bring complicit powerful politicians to book as they are believed to be sponsors of machete gangs’ violence in Midlands and Mazowe.
Economic analysts said the 100 tonne gold output target by 2023 can be reached if the authorities put in place friendly mining policies and incentivise miners.