Gold sector braces for turbulence

LIVINGSTONE MARUFU

Zimbabwe’s gold sector could be headed for a fresh crisis as artisanal and small-scale miners (ASM), represented by the Zimbabwe Miners Federation (ZMF), openly resist the Reserve Bank of Zimbabwe (RBZ)’s newly introduced 10% local currency surrender requirement, Business Times has established.

The mounting pushback comes as the policy marks a departure from previous arrangements that allowed small-scale miners to retain 100% of their foreign currency earnings, a framework widely credited with driving output growth and strengthening national reserves.

That momentum culminated in a record-breaking performance in 2025, with gold output surging to an all-time high of 46.7 tonnes, up from 36.48 tonnes in 2024.

The growth was largely powered by small-scale miners, who accounted for approximately 75% of total production, underpinned by favourable pricing and supportive government incentives.

Gold export earnings surpassed US$4 bn, contributing between 40% and 50% of Zimbabwe’s total exports and providing critical support to the Zimbabwe Gold (ZiG) currency. The output not only exceeded the government’s 40-tonne target but also outperformed Fidelity Gold Refinery’s projection of 45 tonnes.

Of the total deliveries, artisanal and small-scale miners contributed 35.1 tonnes, while large-scale producers accounted for the remaining 11.68 tonnes.

However, under the latest Monetary Policy Statement, miners are now required to accept 10% of their payments in ZiG, a move that has unsettled the sector and triggered warnings of potential unintended consequences.

Industry players fear a repeat of past policy missteps that led to declining deliveries to Fidelity and a surge in gold leakages through informal channels.

ZMF chief executive officer Wellington Takavarasha confirmed that the federation is actively engaging authorities in search of a workable compromise that preserves production incentives.

“We are engaging with the relevant authorities to see how the issue can be resolved,” Takavarasha said, underscoring the need for a balanced approach that maintains confidence in the formal gold market.

However, resistance within the sector is already mounting, with some miners openly rejecting the new requirement.

“The main reason why gold output has continued to hit record levels is the freedom to sell without restrictions and at viable prices,” one small-scale miner said.

“With the introduction of these constraints, some of our members will opt out of selling to Fidelity and instead seek alternative markets that offer better value.”

Miners argue that while the ZiG currency has shown relative stability, the structure of their cost base, largely denominated in US dollars, places them at a disadvantage.

“We procure most of our inputs in US dollars, so receiving part of our earnings in ZiG creates a mismatch,” the miner added. “There are also concerns about delays in settling ZiG obligations, which could tighten already strained working capital.”

RBZ Governor Dr John Mushayavanhu has defended the policy, arguing that it is necessary to curb arbitrage and restore integrity within the gold marketing system.

The central bank has raised alarm over growing cases of “gold laundering,” where large-scale producers allegedly channel their output through small-scale miners to evade higher surrender requirements.

“We were beginning to see arbitrage activities where large-scale gold miners were marketing their gold via the small-scale channel,” Dr Mushayavanhu said. “We want to close that gap.”

Analysts say the move is also aimed at addressing long-standing distortions in production data.

Official statistics for 2025 show that artisanal and small-scale miners accounted for approximately 75% of Zimbabwe’s total gold output, a figure that has raised eyebrows across the industry.

Market watchers have questioned whether this dominance reflects genuine productivity gains or is artificially inflated by large-scale producers exploiting regulatory loopholes.

The widening output gap between small-scale and large-scale miners has fuelled suspicions that some major mining firms are using smaller operators as conduits to bypass the mandatory 30% surrender requirement.

By introducing a local currency component to small-scale payments, the RBZ hopes to reduce the attractiveness of such arrangements and tighten compliance across the sector.

However, with tensions already rising and miners signalling possible resistance, the effectiveness of the policy may ultimately hinge on whether authorities can strike a delicate balance between regulation and incentive, without undermining the very production gains that have sustained Zimbabwe’s gold sector.