RBZ yields to gold miners demand

SIMBA RUSHWAYA/ LIVINGSTONE MARUFU

The Reserve Bank of Zimbabwe (RBZ) will offer gold miners a special rate of 1:3.5 as it capitulates to demands by small scale yellow metal producers who had outrightly rejected the 55 percent forex retention.

This comes barely a week after central bank chief John Mangudya liberalised the foreign exchange market, abandoning the parity between the bond note and United States dollar which has been in existence since 2016.

At opening of interbank foreign exchange trades, local banks traded the greenback at 2,5 against the local currency now known as RTGS dollars.

It also comes as the RBZ is increasingly under pressure from exporters across the board, including the manufacturing sector who feel that the float should be pegged at 3,5. This will not only ensure that exporters get fair value but will also assist in wiping out the black market whose rates have remained firm at between 3,4-3,8 The introduction of a special rate comes at a time gold deliveries dipped to 20 kilogrammes last week as miners are on go-slow against RBZ’s review of the forex retention threshold to 55 percent from 70 percent for small miners in the latest Monetary Policy Statement.

Mangudya was forced to engage the Zimbabwe Miners Federation (ZMF) and other stakeholders including the Gold Mobilisation Taskforce in to find a lasting solution to the impasse.

The producers, apart from holding on to the commodity, had threatened to find alternative markets to sell the mineral because of the low returns. It is estimated that about 30 tonnes of gold was smuggled to South Africa.

Mines and Mining Development Ministry, Gold Mobilisation Taskforce officials and Mangudya met Tuesday afternoon to address miners’ plight.

Mangudya told Business Times that the central bank will ensure that gold producers get favourable rates for them to continue producing. “We agreed to pay gold miners a forex exchange rate of 3,5 for their remaining 45% of the amount paid in local currency. We have also agreed to facilitate the documentation for miners to get forex in the remaining 45% if the producer is procuring critical machinery for mining,” Mangudya said.

“Gold is the most liquid commodity in the world as its transactions only takes a maximum of seven days to process, therefore such a decrease to 20kg in the past six days is a cause for concern for the country. We feel there is need to encourage the goose that lays the golden egg to continue producing the yellow metal.”

ZMF president Henrietta Rushwaya could not be drawn into commenting on the central bank’s latest adjustments.

At a gathering to review the MPS in Harare this week, gold producers threatened to withhold the mineral until their concerns were addressed.

Sasha Gomez, one of the biggest gold buyers in the country who attended the meeting, said the RBZ should pay at least 90% of the gold delivered in hard currency to keep away foreign buyers who offer cash in US dollars.

The miners at the indaba blamed the central bank for giving monopoly to Fidelity Printers and Refiners to buy gold saying the parastatal took time to pay their dues.

Chris Hukama from Hurungwe Kariba Association said gold deliveries would remain low until authorities recognised the small-scale miners as the primary producers of gold.

Hukama said small scale miners were not consulted and needed recognition despite the sector producing more than the primary producers.

“A miner submits his requirement and FPR tells you who to sell to. Our economy is in a volatile situation; you can’t plan for three years in advance and yet the gold initiative fund takes years to supply the equipment we have applied for and this will eat into our planning and finances. Until and unless you recognise our importance into this industry, you will get the amount of gold that you want. You must treat us fairly,” Hukama said.

Fidelity Printers Gold Buying Manager Mehluli Dube said his company will address the producers’ needs, while Mines and Mining Development Deputy minister Polite Kambamura said the government was worried that the mineral was being smuggled and under-valued. Kambamura said Zimbabwe was producing close to 100 tonnes of gold although only a third of it is declared through the normal channels.

Zimbabwe’s monthly gold output has been on a steady increase averaging at least 1,56 tonnes a month since November last year.

“In October, gold production partly dropped, but it started rising again resulting in the collection of 1,4 tonnes in November while in December and January we recorded 1,6t and 1,7t, respectively,” he said.

Kambamura said despite the monthly increase the gold collected in January this year slightly dropped compared to the same period last year.

“In January last year, 2,5 tonnes of gold were delivered to Fidelity Printers against 1,7 tonnes delivered this year,” he said.

Last year, Fidelity Printers and Refiners initiated investigations on registered gold buying agents amid indications of rampant black market dealings, which could be prejudicing Zimbabwe of millions of dollars.

This comes against a backdrop of some registered gold buying agents, particularly in Matabeleland and Midlands, buying a gramme of gold at $48 (bond notes) and US$38/ gramme in cash.

This was in violation of Fidelis Printers and Refineries regulations, which require buying agents to pay 70 percent through bank transfer and 30 percent cash.