Fidelity forex retention adjustment, fine gold, miners speak out
THE Reserve Bank of Zimbabwe yesterday announced that forex retention for gold had been revised up from USD 55% and 45% rtgs to USD 70% to 30% rtgs. The Apex bank also revealed that Miners will be paid 100% USD for fine gold.
In a statement, FPR general manager Mr. Fradreck Kunaka said the new gold trading framework was with effect from 26 May 2020.
“Gold producers shall be paid under a 70/30 payment arrangement scheme in terms of which 70 percent of the gold sale proceeds shall be paid into the producer’s Nostro account and the balance of 30 percent shall be paid in local currency at the ruling exchange rate into the producer’s ZW$ account,” he said.
The move was received with mixed feelings but overally miners agreed it is a step in the right direction.
Legendary miner Eng Chris Murove said it was a positive move and it is plausible that government heeded miners, call.
“Its a step in the right direction and the government has finally heeded our call and I foresee deliveries to Fidelity improving”, Murove said.
Another miner said,” While I welcome the increase, there is still a catch why cap the Price at a flat fee of us$45/g when world prices are soaring on the world market.
Another added, “World price is (currently) 55usd per gram. We are getting 45usd per gram, which is in reality 80% of the world price. While we appreciate the efforts they are still a far way off 100%, no matter how it is worded”.
The most outstanding question yesterday was what is fine gold and can small-scale miners produce fine gold?
What is fine gold and can ASM produce it
Fine gold is the total weight of gold without any impurities and it is only attainable by refining. ASM produce gold raw bullion which has to be refined to produce fine gold. A gold refinery receives the raw bullion and re-liquefies the metal in a hot furnace, then adds various chemicals to the molten substance to separate the gold from the other metals.
We have written a lot of articles about this and finally, someone has listened. The Elephant in the room has finally been addressed however the area of concern now is the 30% rtgs payment. The disparity between the official USD rate and bank rate vs the parallel market rate needs to be fixed to solidify Fidelity’s market share.