Gold glitters

... as deliveries record second best output




Gold deliveries to Fidelity Printers and Refiners (FPR) soared 55% to record 29.6 tonnes   in 2021 from 19.05 in 2020 on the back of timeous payments and incentives given to yellow metal producers, Business Times can report.

The 33.4 tonnes of gold delivered in 2018 is the best output ever then followed by 29.6 tonnes last year.

FPR general manager Peter Magaramombe confirmed the surge in deliveries.

“I can’t give you the exact figures right now but   what I can tell you is that we have surpassed the 28 tonnes by a wide margin due to timely payments and incentives we are giving to our gold miners,” Magaramombe told Business Times this week.

In a statement the Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said various initiatives by the central bank and the government paid dividends.

“RBZ wishes to express its appreciation and gratitude to the country’s small and large scale gold producers for having delivered a total of 29.6 tonnes of gold to FPR in 2021, a 55 % increase from the 19.05 tonnes delivered in 2020.

“Large scale gold producers delivered 11.15 tonnes while small scale gold producers contributed 18.4 tonnes,” Mangudya said.

He said the central bank commends the government for the Gold Incentive Scheme introduced in May 2021.

The 29.6 tonnes is expected to go up when the Platinum group metals  include their tally  of gold deliveries to Fidelity Gold Refinery.

Gold deliveries to Fidelity Gold Refineries started slowly at 3.97 tonnes during the first quarter then moved to 5.97 tonnes during the second quarter, 8.94 during the third quarter and 10.73 during the fourth quarter.

In June last year, gold deliveries stood at 9.948 tonnes. However, in subsequent months, gold miners delivered more than 18 tonnes due to the 5% incentive.

As at the end of November, 25.36 tonnes were delivered to FPR against 17.44 tonnes delivered during the same period in the previous year.

On a monthly basis, gold output rose 127% to 3.33 tonnes in November from 1.47 tonnes recorded during the same period during the previous year.

The November production was the highest output  in 2021 followed by September output of 3.17 tonnes.

From the 25.36 tonnes delivered to FPR, small scale miners contributed 15.21 tonnes with  big mining houses accounting for 10.14tonnes.

Gold is the third largest foreign currency earner after platinum and diaspora remittances.

However, the yellow metal has in the past been smuggled due to payment delays by FPR and low prices compared to those obtaining on the international market.

Authorities have rectified the problem with payment being timeous and prices at par with those on the international markets.

In addition, the central bank has also scrapped taxes on small scale miners to encourage deliveries through formal channels.

Experts say there is a need to review retention levels for the large scale miners and capacitation of small scale miners to ramp up production.

“Some small scale miners are reluctant to sell to FPR because they know that the Zimbabwe Revenue Authority  (Zimra)will access their information. They prefer selling to a parallel market where the tax collector does not have access to their records,” an industry expert said.

“The authorities should not chase after taxes as they should evaluate the cost of losing billions of US$ against limited amounts from taxes.”

Magaramombe said there were plans to increase presence by establishing more gold buying centres in all active regions.

“We are facilitating a loan facility to capacitate existing and new gold mining ventures so as to increase production. We will also retain the favourable currently obtaining incentive regime and lobby for policies that promote investments into the gold mining sector,” Magaramombe said.

On Tuesday international gold prices stood at US $57 911 per kilogramme and Fidelity was paying above US$57 500 per kg to those who delivered above 20kg.

The government has moved to provide equipment in gold centres to move towards helping the attainment of US$4bn gold export revenue.

The government wants to establish new gold centres following a sudden increase in output.


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