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Gold export receipts top US$1bn

Gold export receipts top US$1bn

8 reasons why gold forex retention should be revised upwards

Zimbabwe’s yellow metal export receipts rose 7.6% to US$1.057bn by mid-November this year from US$982.3m during the same period last year due to improved gold deliveries.

The year 2021 was a year of two halves where the deliveries were on the low side during the first half when 9.948 tonnes were delivered and the strong second half of 15.41 tonnes, with the spike in deliveries inspired by incentives and timeous payments.

Despite the fluctuations in deliveries, 2021 was characterised by firm prices due to the fact that when the US$ is vulnerable to inflation, the bullion works as a back-up currency.

According to the Reserve Bank of Zimbabwe (RBZ), gold export receipts are expected to further improve next year riding on the current high volumes.

“Latest gold shipments stand at US$1.056bn against US$982.3m shipped last year and this is mainly due to improved deliveries and firming prices. “Gold export receipts rose 10.5% up to the end of September 2021 to US$788.7m from US$713.9m recorded during the same period last year,” RBZ said.

Mineral export receipts reached US$4.4bn from US$3.65bn, mainly due to strong performance from platinum which contributed US$2.3bn.

Gold deliveries rose 45% to 25.36 tonnes during the 11 months of the year from 17.44 tonnes delivered to Fidelity Printers and Refiners (FPR) during the same period last year due to improved mining conditions and incentives.

The cumulative gold output of above 25 tonnes is the third highest national production level with a month to go, the national output is expected to surpass 28 tonnes.

Gold output rose 127% in November this year to 3.33 tonnes from 1.47 tonnes recorded during the same period last year.

The November production is the highest output so far this year followed by September output of 3.17 tonnes.

From the 25.36 tonnes delivered to FPR, small scale miners accounted for 15.21 tonnes with primary producers chipping in with 10.14 tonnes.

Gold is Zimbabwe’s third largest foreign currency earner behind platinum and diaspora remittances.

However, the sector had been stymied by delays in paying for gold delivered and prices lower than those prevailing on the international market thereby fuelling smuggling of the yellow metal.

In June, the central bank scrapped taxes on small scale miners, began timeous payments and paid the prevailing international gold prices.

Zimbabwe is targeting an output of 100 tonnes by 2023. Experts say there is a need to review retention for the large scale miners and capacitation of small scale miners to ramp up production.

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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.

The gold centres are expected to provide basic equipment such as compressors and jackhammers as well as working capital to facilitate optimal production by small-scale miners who supply gold ore.

Some of the gold centres are expected to be established in Makaha, Odzi, Mount Darwin, Shamva, Mazowe and Silobela.

 

 

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