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Chinese Miner Sentenced to 30 Years in Jail for Killing Gokwe Man

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In a move that has brought relief to locals, who often feel powerless against abusive Chinese miners and businessmen, local courts have sentenced Cai Yulong, a Chinese miner, to 30 years in prison for the murder of one man, the injury of another, and the assault of a third individual.

By Ryan Chigoche

In a report from June 2024, the National Prosecuting Authority (NPA) stated that Cai (58) shot and killed a man from Chief Njelele in Gokwe and injured his colleague after they allegedly encroached on his mine in Zhombe.

On May 26th, Cai Yulong, a Chinese national operating Stone Steel Blue Mine in Zhombe, became involved in a mining dispute with the deceased and his workmates, all employed by Black Hand 10 Mine.

According to court documents, the deceased and his colleagues were on duty, underground, constructing a barricade in an area where their mine meets that of the accused, Yulong. While they were working, the accused approached and opened fire on them. They fled the scene toward the exit, but Yulong pursued them, shooting the now-deceased man in the thigh. The victim later died from the gunshot wound. Yulong also shot one of the deceased’s workmates in the knee and thigh before assaulting another on the head with his fists.

A police report was made, leading to Yulong’s arrest. He has now been convicted and sentenced to 30 years in prison for murder and an additional 5 years for attempted murder, with both sentences running concurrently.

This ruling comes at a critical time, as there have been growing concerns about the protection of locals in the face of abuses by some Chinese involved in small-scale mining operations, as well as the manufacturing industry. With numerous reports of human rights abuses and little action taken against perpetrators, many have questioned whether the legal system is capable of safeguarding local citizens’ rights.

The perceived impunity enjoyed by some foreign nationals has worsened these fears, creating an environment where local communities feel increasingly vulnerable in their own country.

In July, Zimbabwe deported two Chinese nationals accused of hanging two mine employees on a front-end loader, a case that ignited debate about alleged abuses by investors from the Asian country.

Last year, Zimbabwean labour unions wrote to the government, demanding an investigation into Chinese employers, who they claimed had become notorious for violations such as torture, beatings, gender-based violence, low wages, and a host of other labour transgressions.

Although the Chinese have invested millions in Zimbabwe, incidents of abuse against locals by some individuals continue to tarnish their partnership and development efforts.

Moreover, local communities often face displacement as mining operations expand. Residents are frequently forced off their land without proper compensation or resettlement plans, worsening their economic hardships and undermining their livelihoods. Additionally, there have been reports of physical violence and intimidation against local workers and community members who protest these injustices, fostering a climate of fear and oppression.

The lack of oversight and accountability for Chinese companies operating in Zimbabwe’s small-scale mining sector has contributed to these ongoing abuses. As foreign investment increases, the need for regulatory frameworks to protect local communities and uphold human rights has become increasingly urgent. Human rights organizations continue to call for greater scrutiny of these practices and advocate for the protection of local workers and communities affected by Chinese mining operations.

Kamativi’s Lithium Paradox: A Mystery to Its Own Communities

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While lithium is critical to the green energy revolution, ensuring emissions are drastically reduced and emerging as a vital energy source alongside other minerals, communities in Kamativi remain largely unaware of lithium’s role in this transition. Moreover, they lack an understanding of the green energy transition itself and the by-products of lithium mining.

By Rudairo Mapuranga

Critical minerals like lithium are essential for the shift to a low-carbon future. They are used in various technologies that reduce reliance on fossil fuels, including electric vehicle batteries, wind turbines, and solar panels. Lithium, in particular, is prized for its high energy density, making it ideal for rechargeable batteries—a key component of green energy infrastructure. As the world seeks to mitigate climate change, the demand for lithium and other critical minerals is expected to surge, making them invaluable to the global economy and environmental sustainability.

In an effort to understand the expectations of Kamativi’s communities regarding mining operations, Mining Zimbabwe discovered that while locals are aware that companies in Kamativi are mining or processing lithium, they are not fully informed about the significance of lithium as a mineral. Many are unaware of its critical importance, and some do not even recognize lithium-bearing pegmatite rocks when they encounter them.

Speaking to Kamativi’s traditional leader, Chief Nekatambe of Dete, Hwange, it became clear that while he understands that Kamativi Mining Company (KMC) is mining and processing lithium, and Pan African mining company Bravura Group is processing the dump left by Kamativi Tin Mine for lithium, he is not aware of what lithium is used for or the broader green energy revolution.

“I’m aware that they are mining and processing lithium here. But I’m not aware of what lithium is used for,” Chief Nekatambe admitted.

He was not alone in these sentiments. Hwange Rural District Council, represented by Eng. Alic Mudenda, although aware of what lithium is, could not clearly articulate its importance to the just energy transition or even define what the just energy transition is.

“I’m aware that lithium is the core mineral being mined here by two companies, particularly Kamativi Mining Company. The call to action, especially regarding greenhouse gases and natural resources, aims to move the country into a $12 billion economy by 2030,” Eng. Mudenda said.

Are Communities Aware of the Benefits Brought by Critical Minerals?

While critical minerals like lithium are essential to the energy revolution, local communities seem more concerned with immediate employment opportunities rather than the potential export of jobs to other countries in the form of value addition, such as battery manufacturing.

“Well, they’ve definitely created employment, which is very good. What I’m looking forward to is if they can also give back to the communities, such as providing water boreholes where there are none. I would be very happy,” Chief Nekatambe expressed.

“The impact of these minerals will primarily affect Kamativi, changing the life of the community in terms of income, shelter, education, and raising money for children to go to school. Additionally, the arrival of these mines will bring benefits to the business community by generating revenue from mining operations, thereby boosting businesses around Kamativi,” Eng. Mudenda added.

Are Mining Companies Employing Enough Local People?

While community leaders were satisfied that companies were employing local people and providing them with opportunities to earn an honest living, members of the community expressed a different perspective. Ian Muleya, a local resident, noted that the community is not truly benefiting from Kamativi Mining Company’s employment, as it includes many Chinese nationals. He suggested that the Chinese should do better by engaging in more skills transfer.

Is There a Significant Change Brought by the Companies?

“Since KMC began operating, we have witnessed several changes. They have improved road infrastructure, rehabilitating the road from Kamativi town to the clinic, which was previously dilapidated. They have also made changes to the infrastructure within Kamativi, including bringing in electricity that had been vandalized in 1994,” Eng. Mudenda stated.

“At the moment, we haven’t seen much because they are not fully operational yet. But from what I’ve observed, they are doing well as far as employment is concerned. When they are hiring, they communicate with me, asking if I can submit a few names from the community to work for them. That communication pleases me very much. I also urge these workers to be 100% sober because the machines they operate are very expensive. I’m happy because this keeps them busy and away from illicit drugs. I’m happy, and I hope our president continues bringing in investors so that people can work,” Chief Nekatambe remarked.

CSR: Do They Engage?

The communities were generally satisfied with how the companies were engaging them in corporate social responsibility (CSR) strategies. However, there are additional expectations that communities have from these companies.

“They engage with us, and I refer them to the communities. The communities are the ones that know what they need, so I always say, go to the communities. They will tell you exactly what they require. We have mentioned that most of our schools are in very poor condition, so we have urged them to improve and even construct more blocks at certain schools. I believe they are listening to what the president is always saying,” Chief Nekatambe said.

“Regarding CSR, KMC has been engaging in activities such as rehabilitating communities, building bus terminuses, drilling boreholes, and re-articulating vandalized areas. However, it’s an area that needs reinforcement, and we also need to ensure that these initiatives are community-driven rather than company-driven,” Eng. Mudenda added.

Do They Operate in a Safe Environment?

“In terms of environmental impact, while there’s a need for improvement in protecting the environment and the people, we haven’t heard any reports of hazards affecting the community. We continue to encourage companies to protect the environment, animals, and people around the mining area. We also urge miners to discuss safety measures, including holding toolbox talks every morning,” Eng. Mudenda emphasized.

“I’ve engaged with them and observed that their protective clothing is very proper. I think in terms of health issues, it’s essential that healthy practices are maintained, and investors should ensure that people do not develop diseases over time. But I think safety first. It’s very, very important,” Chief Nekatambe concluded.

Conclusion

The community in Kamativi is undergoing significant changes due to the presence of KMC and Bravura, particularly with the mining of lithium. Improvements in infrastructure, employment opportunities, and engagement in community-driven initiatives are positive signs of how these companies are impacting the area. However, there remains a crucial need for increased awareness and education about the importance of critical minerals like lithium, which are central to the green energy revolution.

Organizations such as the Green Governance Zimbabwe Trust (GGZT) can play a vital role in bridging this knowledge gap. GGZT, with its focus on promoting sustainable development and environmental stewardship, can work alongside government institutions to ensure that communities like Kamativi are well-informed about the significance of the minerals in their region. GGZT can also advocate for responsible mining practices and help align CSR initiatives with the true needs of the community.

Additionally, corporate social responsibility (CSR) must genuinely reflect the priorities of the local population for long-term sustainable development. Addressing concerns about environmental safety and health practices through ongoing dialogue between the community, companies, and organizations like GGZT will be critical. By prioritizing safety, environmental protection, and meaningful community involvement, these mining operations have the potential to bring about transformative benefits for Kamativi and ensure that the community truly benefits from its rich mineral resources.

Zimbabwe gold buying prices per gram 19 September 2024

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Fidelity Gold Refinery (FGR) official gold buying prices per gram. See the Zimbabwe gold buying prices per gram today, 19 September 2024.

SG 90% and ABOVE US$78.08/g
SG ABOVE 85% BUT BELOW 90% US$77.25g
SG ABOVE 80% BUT BELOW 85% US$76.43/g
SG ABOVE 75% BUT BELOW 80% US$75.60/g
SAMPLE BELOW 10g BUT ABOVE 5g US$74.36/g

Fire Assay CASH $78.49/g

NB: Fire Assay cash price is for gold above 100gs, no sample is deducted.
For the Fire Assay Transfer price, a sample of not more than 10g is deducted
A 2% royalty is charged on all deposits (Small-scale miners)
A 5% royalty is set for Primary Producers

Cash available. Fidelity Gold Refinery prices will be changing daily to match world market prices.

Small-Scale Miners Responsible for Huge ZESA Debt – Chamber

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The Chamber of Mines Zimbabwe (CoMZ) said that small-scale miners are responsible for the significant debt the mining sector owes to the Zimbabwe Electricity Supply Authority (ZESA), as members of the Chamber are under pre-supply agreements with the power utility.

By Ryan Chigoche

A few weeks ago, ZESA revealed that the mining sector, Zimbabwe’s largest consumer of energy, currently owes a staggering ZWG$684.8 million (US$45.6 million), representing 12% of ZESA’s total debtors’ book. This situation places a significant financial strain on the utility.

This revelation raised concerns, as Zimbabwe’s mining industry has long criticized authorities for their failure to provide a reliable power supply, an essential component for their operations. Mining companies depend heavily on consistent electricity to power machinery and equipment critical for extraction and processing. Without a stable power supply, productivity is severely compromised, leading to increased costs and inefficiencies.

Speaking to Mining Zimbabwe, Chamber of Mines Zimbabwe President Thomas Gono stated that small-scale miners are responsible for the debt, as members of the Chamber are already in pre-supply agreements with the authority.

“Members of the Chamber of Mines enter into power supply contracts, some of which provide for prepayments for estimated electricity requirements. In some instances, these agreements assist ZESA in amortizing obligations with their regional suppliers for imported power. For those not in such contracts, failure to settle electricity bills will result in termination of the power supply. Further analysis of the debt indicated by ZESA shows that the bulk of the arrears are attributable to small-scale operations,” Gono said.

“The Chamber of Mines continues to encourage its members to settle their electricity bills timeously to provide cash flow capacity to ZESA and ensure that ZESA continues to supply power into the economy,” he added.

Faced with a debt crisis, the Zimbabwe Miners Federation (ZMF) recently advised its members to switch to the prepaid smart metering system for electricity to prevent worsening power supply issues that could negatively impact their operations.

It is important to note, however, that artisanal and small-scale miners account for at least 60% of the country’s gold output. According to the country’s exclusive buyer of the yellow metal, Fidelity Gold Refinery (FGR), artisanal and small-scale miners delivered 2.4 tonnes of the precious mineral, a 50% increase from the July figure of 1.6 tonnes.

Underpinned by the small-scale mining industry, Zimbabwe’s overall gold deliveries during the same period improved by 36% to 3.4 tonnes, compared to 2.5 tonnes in July this year, while large-scale producers’ output increased to one tonne from 999 kilograms in July.

Gold remains Zimbabwe’s top export earner, with the government targeting 40 tonnes of gold production this year, up from 30.1 tonnes in 2023. By next year, gold is projected to generate US$4 billion, up from the current US$3 billion.

Kuvimba to Host Jumbo Golf Tournament in Mutare

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Mutapa Investment Fund-owned Kuvimba Mining House (KMH) will host the Chamber of Mines Inter Mines Golf Tournament, popularly known as the Jumbo Golf, at Hillside Golf Course in Mutare on Saturday, Mining Zimbabwe reports.

By Rudairo Mapuranga

Briefing the Media in the capital on Wednesday, Chamber of Mines CEO Isaac Kwesu announced that KMH will proudly host the 2024 edition of the Jumbo Golf Tournament, with their subsidiary Freda Rebecca assisting in coordination.

He stated that the Jumbo Golf Tournament is a key event on the Chamber of Mines’ calendar, consistently bringing together important participants from across the mining value chain, including Chamber members, associates, suppliers, and other stakeholders.

“The Chamber of Mines Inter Mines Golf Tournament, popularly known as the Jumbo Golf, for the 2024 edition, will be proudly hosted by Kuvimba Mining House, specifically their subsidiary, Freda Rebecca, who will assist in coordination. This event has been one of the key events on the Chamber of Mines’ calendar over the years.

It has brought together key participants in the mining value chain, including our mines, specifically our Chamber members, associates, suppliers, and all other important stakeholders. They come together not just for networking but also to share important information on how mining activities can be improved, specifically efficiency, the procurement of materials, and policy matters affecting the mining industry,” Kwesu said.

According to Kwesu, the tournament serves as an opportunity not only for networking but also for sharing valuable information on how mining activities can be improved, particularly in terms of efficiency, procurement, and policy matters affecting the industry. Each year, senior executives, managers, and other stakeholders come together to discuss pressing issues that help guide engagement and lobbying efforts for the betterment of the mining sector.

He also mentioned that the Chamber of Mines was established to promote, encourage, and support the mining industry. While the golf tournament offers a chance to relax, the Chamber’s mission remains central.

He further noted that Kuvimba Mining House has done everything possible to ensure the success of this event, which will be held at Hillside Golf Course in Mutare.

“Each year, when we meet, particularly senior executives and managers along with other stakeholders, we discuss issues that are important when engaging or lobbying for the benefit of the mining industry. As you are aware, the Chamber of Mines was created to promote, encourage, foster, and do everything possible for the benefit of the mining industry. While we enjoy the golf tournament, we do not forget the purpose of the Chamber of Mines.

This event typically runs for two days, and this year it will be held from the 21st to the 22nd, next Saturday and Sunday. We hope all participants will find value in their involvement in this year’s event. We have no doubt that Kuvimba Mining House, the host, has done everything possible in preparation,” Kwesu said.

KMH Group CEO Trevor Barnard, speaking at the same event, added that they are honoured to host this year’s tournament and emphasized the company’s commitment to supporting local industry and suppliers in Mutare.

He said Kuvimba’s vision is to create a better future for Zimbabweans by developing mineral resources to generate value for stakeholders and sustainably improve livelihoods for future generations. The support of the Chamber of Mines, a valuable partner, is crucial to achieving these goals.

According to Barnard, the tournament is meant to be enjoyable, but there’s also a competitive edge. It serves as a networking opportunity for industry players across the country, including a few professionals. Activities will include a cocktail function and the main dinner event on Sunday, September 22nd, where numerous prizes will be awarded.

“We are honoured to host this year’s annual Chamber of Mines Golf Tournament, which will be held in Mutare at the Hillside Golf Course.

We specifically selected this venue to support the local industry and suppliers in the Mutare area. Our vision at Kuvimba Mining House, as we’ve stated previously, is to create a better future for Zimbabweans. Our mission is to develop mineral resources, as a mining house, to create value for our stakeholders and sustainably improve the livelihoods of Zimbabweans for future generations.

We cannot achieve this without the support of our friends at the Chamber of Mines. I would also like to take this opportunity to thank them for their support, not only over the years and to date but also into the future. They have become a valuable partner in our industry.

This tournament is meant to be fun, and we want participants to enjoy it, but there’s also a competitive edge, as you can expect. We use this as a networking opportunity among all players in the mining industry. And I’m not just talking about golf players, but industry players.

We are expecting many participants from across the country, as well as a few professionals. The activities will include a cocktail function and the main dinner event, which will be held on Sunday, the 22nd of September, with many prizes to be won,” he said.

Local Foundry Sector Struggling to Raise Retooling Funds

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The Zimbabwe Institute of Foundries (ZIF) says there has been little progress in raising funds for the revival of the foundry sector, as hopes were dashed after the government advised them to seek creative ways to source money from their members, Mining Zimbabwe reports.

By Ryan Chigoche

The foundry sector plays a crucial role in Zimbabwe’s industrial landscape, serving as the backbone of various industries, including mining, agriculture, and manufacturing. It provides essential components and equipment, making it vital for the country’s economic growth and development. Foundries produce a diverse range of cast components, including iron, steel, and aluminium castings, with an estimated annual production of around 40,000 tonnes.

However, the local foundry sector has recently been in a deplorable state, facing numerous challenges, including a shortage of raw materials and an unreliable power supply, both of which have affected production. Chief among these challenges is insufficient investment in modern technology and infrastructure, which limits production capacity, as many local foundries still rely on outdated methods, hindering their efficiency and competitiveness.

Late last year, ZIF Chief Operations Officer Dosman Mangisi told Mining Zimbabwe that for the sector to be fully retooled and competitive, an investment of US$100 million was required, with much of the funding expected to come from the Treasury due to the sector’s importance.

However, speaking to Mining Zimbabwe recently, Mangisi stated they have been unable to attract the desired funding, as the Ministry of Finance encouraged them to find strategic ways to raise the required funds independently.

“The progress looks positive, though it’s taking time. We were just having some discussions with the Minister of Finance recently, and they encouraged us to focus on business within the local sector, especially by tapping into medium-scale miners. This is part of our feasibility study for the foundry industry, so we can serve local industries. Once business moves in that direction, confidence in the industry will increase.”

“We are already working with financial sectors, such as banks. That’s why you see us collaborating with suppliers and miners. We need financiers because we are trying to partner with other local entities,” Mangisi added.

Zimbabwe has set an ambitious target of achieving a US$40 billion mining sector by 2030, viewing this goal as a cornerstone of the nation’s economic development aspirations. A critical component in reaching this target is the foundry sector, which provides essential components and equipment necessary for efficient and safe mining operations. Foundries play a vital role in the mining value chain, from the extraction of ore to the processing and transportation of minerals.

As one of the mining sector’s largest suppliers, foundries provide machinery and parts such as crushers, grinding mills, conveyor belts, and mining trucks. These components are crucial for ensuring the effective and safe extraction of minerals.

In addition to funding challenges, the revival of the foundry sector is stifled by competition from cheap imports. Zimbabwean manufacturers struggle to compete with lower-priced goods flooding the market, which undermines local production. There is also hesitance among authorities to protect domestic industries, as Zimbabwe operates within a global market that emphasizes trade liberalization. This lack of protective measures leaves local foundries vulnerable to foreign competition, further hindering their ability to thrive.

During his brief tenure as Minister of Mines and Mining Development, Soda Zhemu proposed levying a tax on miners to fund the retooling of the foundry sector. This initiative aims to enhance efficiencies within the foundries, enabling them to compete in the global market. Zhemu emphasized the need for innovative funding solutions for the foundry sector, hinting at a new tax on miners to provide a critical source of funding to strengthen the sector and support Zimbabwe’s broader mining industry goals.

Foundries play a pivotal role in Zimbabwe’s mining sector, significantly contributing to the country’s economic landscape. By transforming raw ores into usable metal products, foundries facilitate the processing of various metals extracted from mines. This not only supports local industries but also enhances Zimbabwe’s position in the global market, as processed metals are essential for both domestic use and export.

In addition, local foundries reduce the mining sector’s dependency on imported components, which are often costly and subject to logistical challenges. By manufacturing machinery parts, tools, and other essential components locally, foundries promote supply chain efficiency, minimizing downtime for mining operations. This localized production streamlines the supply chain, allowing mining companies to operate more effectively and respond quickly to maintenance needs.

ZSM Partners with JCMZ to Elevate Zimbabwean Mining Operations

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The Zimbabwe School of Mines (ZSM) has entered into a strategic partnership with the Junior Chamber of Mines of Zimbabwe (JCMZ), a coalition of locally-owned small and medium-scale mining enterprises, to foster professionalism and establish world-class mining operations wholly owned by Zimbabweans.

By Rudairo Mapuranga

Speaking to Mining Zimbabwe, ZSM Deputy Principal, Martin January, emphasized that the collaboration between ZSM and JCMZ aims to empower both miners and students by offering invaluable learning opportunities and professional development.

He highlighted that the partnership is focused on bridging the gap between academia and practical mining operations.

“We want to ensure that our students are not just classroom-ready but industry-ready. Through this collaboration, we assess the needs of JCMZ and supply the necessary human capital while addressing specific research needs that impact junior miners. This will elevate the quality of operations in these mines,” said January.

As part of the collaboration, ZSM also sends lecturers on technical visits to mines under JCMZ, providing expert guidance and contributing to the production of skilled technical professionals. This exchange of knowledge is key to promoting efficiency and growth in the sector.

“There are several services we offer, including laboratory services, survey and geology, as well as mine planning. However, our primary goal with this partnership is to strengthen our collaboration with JCMZ. This is a two-way relationship: we send our students to gain practical experience and understand the real-life challenges faced by miners. In return, students have the opportunity to recommend effective systems that can enhance mine operations,” he explained.

In addition to offering practical learning experiences for students, ZSM’s partnership with JCMZ also involves providing detailed reports prepared by students, guided by their lecturers, outlining potential areas for improvement in the mines.

“At the end of the day, the mines benefit from these reports, which offer actionable recommendations on how to improve operations. This not only benefits the mines but also helps shape the next generation of mining professionals,” he said.

January also emphasized that this collaboration opens doors for students to gain hands-on experience through industrial attachments at JCMZ-affiliated mines.

“We will send students for industrial attachments to the mines, giving them real-world experience in mining operations. It’s a win-win situation for both parties,” he added.

As the partnership evolves, ZSM aims to deepen its involvement by sending lecturers to JCMZ mines to provide ongoing support.

“Our lecturers will work directly with miners, helping them implement the best technical solutions and ultimately ensuring that the sector grows. Miners cannot grow without the backing of skilled professionals, and we are here to produce those professionals,” January concluded.

This collaboration is seen as a game-changer for Zimbabwe’s mining industry, fostering the development of a new generation of skilled miners while elevating local operations to meet global standards. By investing in human capital and promoting technical excellence, ZSM and JCMZ are laying the foundation for a stronger, more sustainable mining sector in Zimbabwe.

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Zimbabwe Gold Buying prices per gram 17 September 2024

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Fidelity Gold Refinery (FGR) official gold buying prices/ gram. See the Zimbabwe gold buying prices per gram today, 17 September 2024.

SG 90% and ABOVE US$78.50/g
SG ABOVE 85% BUT BELOW 90% US$77.67g
SG ABOVE 80% BUT BELOW 85% US$76.84/g
SG ABOVE 75% BUT BELOW 80% US$76.01/g
SAMPLE BELOW 10g BUT ABOVE 5g US$74.76/g

Fire Assay CASH $78.92/g

NB: Fire Assay cash price is for gold above 100gs, no sample is deducted.
For the Fire Assay Transfer price, a sample of not more than 10g is deducted
A 2% royalty is charged on all deposits (Small-scale miners)
A 5% royalty is set for Primary Producers

Cash available. Fidelity Gold Refinery prices will be changing daily to match world market prices.

Drop 75/25 export surrender – National Competitive Commission tells RBZ

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Miners have been given a glimpse of hope as the government-owned National Competitive Commission (NCC) has urged the government to abolish the export surrender requirement and implement policies that support exporters, who continue to suffer from exchange losses.

By Ryan Chigoche

This recommendation was revealed in the NCC’s latest report, which analyzed the Reserve Bank of Zimbabwe (RBZ) Mid-Term Monetary Policy, released last month.

Last year, the central bank allowed exporters, including miners, to retain 75% of their export earnings in foreign currency, up from a previous cap of 60%. However, this still falls short of miners’ demands to retain 80% of their export earnings in foreign currency.

Since then, miners, who desperately require foreign currency, have been pushing for a higher retention rate to meet operational needs.

Currently, Zimbabwe is experiencing exchange rate misalignment, with the official interbank rate of 1 USD: 13.87 ZWG used to liquidate 25% of export earnings, compared to the average parallel market rate of 1 USD: 23 ZWG, resulting in a premium of over 50% as of September 5, 2024.

This disparity has negatively impacted exporters, as they are unable to recover the liquidated foreign currency at the rate at which they are forced to convert a portion of their proceeds to the RBZ.

In its report, the NCC called on the government to abolish the export surrender requirement and instead incentivize exporters to generate the much-needed foreign currency.

“The Commission recommends that the export surrender value should be a temporary measure. A truly reflective exchange rate will unlock free funds from the private sector. The Government should focus its efforts on export promotion through incentives to increase foreign currency inflows and eliminate the surrender value to improve export competitiveness. A more flexible exchange rate enhances the competitiveness of exports and makes imports more expensive, potentially improving the trade balance,” the NCC said.

According to the RBZ MPS review, 50% of the export surrender value is being supplied to the formal market to improve foreign currency supplies. However, this continues to constrain the supply of foreign currency in the formal market, negatively impacting the country’s competitiveness, the NCC noted.

The country’s foreign currency-starved economy requires all exporters to convert part of their export earnings into local currency at an official exchange rate significantly higher than the widely used black market exchange rate, leading to losses for businesses.

The widening gap in the exchange rate is being driven by informal market activities. The NCC also noted that the government is doing very little to control these informal sector activities.