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Gold industry’s huge growth potential

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Gold industry’s huge growth potential

The gold industry has a huge potential to contribute significantly to Zimbabwe’s economic revival, mine industry captains have alluded.

Rudairo Mapuranga

Speaking today at the All Stakeholders Workshop on Gold Sector value Chain Chamber of Mines of Zimbabwe Chief Executive Officer Isaac Kwesu said the industry has a huge potential to contribute to the government’s vision to see the mining industry achieving a US$12 billion annual revenue by the end of 2023.

He said this is possible because the gold industry which has more than 4 000 recorded gold deposits is ranked above traditional big producers in terms of gold production per square km. These are China and the US. Kwesu said it was of importance for the country to attract investment in exploration for the vision to be achieved.

“The Gold industry has huge growth potential to contribute to Government milestone due to an attractive gold prospectivity. The country boasts of more than 4,000 recorded gold deposits. In terms of gold production per square km, the country is ranked above traditional big producers including the USA, Canada, Australia and Brazil. The country has, however, remained largely underexplored, impacting negatively on grades due to limited new discoveries. The last major gold discovery was Freda Rebecca in 1984 and started production in 1988.

“Gold production increased phenomenally from a historical low of 3.6 tons in 2008, to reach a peak of 35 tons in 2018. The sector has emerged from covid-induced contractions in 2019 and 2020 to reach 31.5 tons in 2021. The prospects for the year are on the upside, with deliveries to FPR for the seven months to July 2022 at around 19 tons, 46% up compared to 13 tons in the same period in 2021. Output for the full year 2022 is expected to hit 40 tons, buoyed by favourable prices, ongoing expansion projects and Government incentives. Despite the increase in output, Zimbabwe’s share of gold production in Africa remains low at around 4% (despite doubling from around 1.9% in 2010, 2.5% (2014) and 3.8% (2016),” Kwesu said.

Kwesu said the gold industry was important in the socio-economic development of the country saying that for every dollar generated in the gold industry an additional 3 more dollars are generated through linkages.

“The gold industry remains important in the socio-economic development of the country through its contribution to export earnings, government revenue and employment, among other contributions. In 2021, it accounted for 35% of mineral exports (27% of national exports), and employed an excess of 10,000 people in the formal gold industry with another 500,000 estimated to be involved in small-scale and artisanal mining. Approximately 18% of gold revenues are paid to Government through taxes and other fiscal charges. The gold industry is also intricately linked to the rest of the economy with an estimated multiplier of around 3 (for every dollar generated in the gold industry, an additional 3 more dollars are generated in other sectors through linkages),” said Kwesu.

He said, “The presence of extensive gold deposits coupled with idle capacity (currently operating at around 80%) presents an opportunity for the gold sector to grow and maximise its contribution to the socio-economic development of the country. The gold industry has the potential to grow and surpass annual production of 60 tons in the next 5 years, with revenues exceeding US$3.5 billion at current prices. The firm gold price has seen resuscitation of closed mines including dump retreatment. Most gold projects including marginal mines have emerged to become profitable. To unlock this potential, there is a need to address structural bottlenecks that continue to weigh down the performance and growth of the gold industry,” Kwesu concluded.

Parliamentary Portfolio Committee on Mines and Mining Development Chairperson Hon Edmond Mkaratigwa also said that the mining industry has the potential to transform the economy through the gold industry, however, the smuggling of gold and weak legislation was preventing communities from fully benefiting.

“Honourable Legislators, distinguished participants, Zimbabwe has the potential to transform its economy through these natural resources, which include gold. Mining communities and ordinary citizens would like to see this transformation. Sadly, leakages and weak legal frameworks are making it difficult for citizens to fully benefit from these minerals,” Hon Mkaratigwa said.

The Parliamentary Portfolio Committee on Mines and Mining Development’s all-stakeholder workshop on gold production value is currently underway in Kariba.

The workshop has so far seen input and participation from major Mining institutions including the Portfolio Committee on Mines and Mining Development, Ministry of Mines, The Chamber of Mines of Zimbabwe (CoMZ) and the Zimbabwe Miners Federation (ZMF). More speakers including the RBZ, and Fidelity Gold Refiners (FGR) are expected to make their presentations today.

Mines Committee workshop on gold production value chain takes-off

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Mines Committee workshop on gold production value chain takes-off

The Parliamentary Portfolio Committee on Mines and Mining Development’s all-stakeholder workshop on gold production value chain has taken off.

The workshop will see input and participation from Mining institutions including the Portfolio Committee on Mines and Mining Development, The Chamber of Mines of Zimbabwe (CoMZ), the Ministry of Mines and Mining Development (MMMD), Fidelity Gold Refiners (FGR), Zimbabwe Miners Federation (ZMF), Zimbabwe Environmental law Association (ZELA), The Zimbabwe Republic Police (ZRP), Reserve Bank of Zimbabwe (RBZ) amoungst others.

According to the chairman of the Mines and Mining Development Portfolio Committee Hon Edmond Mkaratigwa, the Mines Committee is the delegate of the Committee of the Whole House which is generally the National Assembly.

“The Committee is established in line with the Standing Rules and Orders of the Parliament of Zimbabwe. That is to represent the sectoral interests in Parliament, to lead in law making process related to the sector, to conduct enquiries and hearings on matters of interest to the sector among others. Basically, we carry on with the broader Parliamentary mandate as enshrined in the Constitution but our work in narrowed to the Mines and Mining Development sector to ensure focused attention, easy capacitation for the task and a manageable responsibility and accountability framework,” said Mkaratigwa

Mines and Mining Development Minister is expected to make a presentation on An Overview of the Gold Production Value Chain: US$ 4 Billion Target, Investment Opportunities, Legal and Policy Framework.

Also to make presentations are Chamber of Mines CEO and ZMF CEO on Gold Mining and Production in Zimbabwe: Challenges and Opportunities.

Later in the day RBZ Governor will make two presentations on the Gold Producers Payment Model in Zimbabwe and the Unbundling of Fidelity Printers and Refiners: Opportunities and Challenges.

The workshop will run for 3 days.

Smaller affordable gold coins expected in November

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Smaller affordable gold coins expected in November

Smaller Mosi-Oa-Tunya gold coins are expected to go on sale in November from the Reserve Bank of Zimbabwe, Central Bank governor Dr John Panonetsa Mangudya has said.

Rudairo Mapuranga

According to Mangudya, the smallest coin containing just over 3.11g of gold, will, according to the current gold coin price, cost US$188.48, or local currency equivalent at the interbank rate.

“Following the successful launch of the gold coins on 25 July 2022 and in response to public demand, the Bank shall introduce and release into the market gold coins in smaller units of a tenth ounce, quarter ounce and half an ounce for sale with effect from mid-November 2022. The features, characteristics and the sale terms and conditions shall remain the same as the current trading arrangements of the gold coins in circulation,” Dr Mangudya said.

The RBZ last month introduced gold coins, known as Mosi-oa-Tunya, onto the market as a store of value.

The gold coin, weighing one troy ounce or 31,1 grammes, with a purity of 22 carats, is available for sale in both local and foreign currencies at a price based on the prevailing international price of gold and the cost of production.

The gold coin, which is sold with an accompanying bearer certificate, has characteristics which include, Liquid Asset Status; Prescribed Asset Status; Can be used as collateral; Tradable and can be bought back after 180 days.

The price of the gold coins is determined by the London Bullion Market Association (LBMA) PM to Fix gold price plus a margin of 5% to cover the production and distribution costs. The price of the gold coin on the date of the initial release, 25 July 2022, was US$1,823.80 or ZW$805,745.35 in local currency. Fluctuations will be experienced in the US$ and ZW$ prices as a result of the movement in the international price of gold and the exchange rate.

Mineral exports up 32% due to increased production

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Mineral exports up 32% due to increased production

Exports of minerals during the first half of 2022 rose by 32 per cent to US$2 899.0 million from US$2 193.8 million recorded for the same period in 2021 on account of higher production, Reserve Bank of Zimbabwe Governor Dr John Panonetsa Mangudya has said.

Rudairo Mapuranga

According to Mangudya merchandise exports increased by 33 per cent to US$3 516.5 million from US$2 649.7 million for the corresponding period in 2021.

“Preliminary estimates show that merchandise exports increased by 33% to US$3 516.5 million in the first half of 2022, from US$2 649.7 million for the corresponding period in 2021, spurred by increases in agriculture, mineral and manufactured goods exports.

“Minerals underpinned merchandise exports performance in the first half of 2022, growing by 32% from US$2 193.8 million recorded for the same period in 2021 to US$2 899.0 million. Mineral export prices were also spurred by heightened geo-political tensions in eastern Europe and inflationary pressures in advanced economies as investors sought refuge in safe-haven assets. Gold exports benefitted from higher global prices amid safe-haven demand, coupled with higher production as incentives to producers continue to bear fruit,” Dr Mangudya said.

Precious metal prices rose in the first half of 2022, although at a slower pace than in the previous year, owing to uncertainties around the ongoing conflict in eastern Europe and subsequent sanctions imposed on Russia, which developments have boosted the appeal of gold as a safe-haven. Furthermore, growing concerns over high inflation have also prompted investors to shift from riskier assets to precious metals as a safe haven. However, the gains in price increases are being moderated by the U.S Federal Reserve Bank’s hawkish monetary policy stance.

Global growth prospects have remained fragile owing to geo-political tensions, rising inflation and tighter financial conditions, global warming and the COVID-19 pandemic. In its July 2022 World Economic Outlook Update, the IMF revised global growth downwards to 3.2 per cent, from the initial estimate of 4.9 per cent in January 2022, with prospects in the short-term remaining gloomy and highly uncertain.

On the domestic front, growth prospects for 2022 remained robust at 4.6 per cent compared to the initial projection of 5.5 per cent, largely due to the underperformance of the 2021/22 agricultural season. Growth for 2022 will mainly be driven by mining and construction activities and accommodation and food services. The anticipated increase in international commodity prices is also expected to further support strong growth in the mining sector, particularly, in gold, diamond and PGMs sub-sectors

BREAKING: Pfungwa Kunaka appointed Mines Perm Sec

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BREAKING: Pfungwa Kunaka appointed Mines Perm Sec

Mines and Mining Development Principal Director Pfungwa Kunaka has been appointed as the new Permanent Secretary of Mines and Mining Development.

Kunaka replaces Onesimo Mazai who has been at the helm after serving for four years. Moyo served as the general manager of Minerals Marketing Corporation of Zimbabwe (MMCZ) before his appointment to Perm Sec.

Who is Pfungwa Kunaka

Pfungwa Kunaka holds a BSc Degree in Economics. He rose within Government services from being an Economist in the Ministry of Finance and Economic Development to the post of Chief Economist Revenue Expenditure, Director, National Budgeting, Chief Director, Resource Mobilisation, Chief Director, Fiscal Policy and Advisory Services and Chief Director, Expenditure Management which Chief Director posts he held since 2007. This experience exposed Mr Kunaka to the planning, evaluation and financing of a wide range of investment projects and programmes by all government ministries, including in the mining sector. In addition, Mr Kunaka engaged with several development partners at bilateral and multilateral levels, and with international financial institutions to hammer out projects, programmes and investment deals on behalf of the country. Under the Second Republic, Mr Kunaka was seconded to the One Stop Shop Investment under the Office of the President and Cabinet to establish the formative infrastructure to operationalise the Zimbabwe Investment and Development Authority (ZIDA). He sits on the Boards of various investment and financial institutions in Zimbabwe.

Kunaka thus brings a vast knowledge of, and experience in public administration and management across all sectors of government, and a deep understanding of the sectors of the economy in relation to their contribution to inclusive and sustainable national development. He is a strategic thinker with a sharp eye for financial analysis and management, evaluation of investments, and negotiation of agreements to the best advantage of the country. The deployment of Mr Kunaka to the mining sector will therefore bring the requisite stability and sustain inclusive growth in the industry in its quest to meet its strategic targets under the ongoing national development programmes in consonance with the realisation of Vision 2030.

Pfungwa Kunaka’s appointment is effective 22nd August 2022

Fidelity official gold buying prices Friday 12 August 2022

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Fidelity official gold buying prices Friday 12 August 2022

Fidelity Gold Refiners (FGR) official gold buying prices Friday 12 August 2022.

SG 90% AND ABOVE US$54.87/g
SG ABOVE 85% BUT BELOW 90% US$54.01/g
SG ABOVE 80% BUT BELOW 85% US$53.43/g
SG ABOVE 75% BUT BELOW 80% US$52.85/g
SAMPLE BELOW 10g BUT ABOVE 5g US$51.98/g
FIRE ASSAY CASH US$54.87/g

Exchange rate TBA

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

Cash available. Fidelity Gold Refiners’ prices will be changing daily in relation to world market prices.

Gold mobilisation efforts see over 20% increase in deliveries

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Gold mobilisation efforts see over 20% increase in deliveries

The country’s gold industry has seen a 20.5 per cent increase in gold deliveries to the country’s sole gold buyer and exporter Fidelity Gold Refinery (FGR) from the government’s gold mobilisation exercise.

Rudairo Mapuranga

Gold mobilisation remains a key strategy for the mining industry to achieve a US$4 BILLION gold target by 2023 with the Minister of Mines and Mining Development Hon Winston Chitando optimistic that the gold sector can reach a target of 60 tonnes production in 2022.

According to the Mines and Mining Development acting Permanent Secretary, Engineer Tahwa the gold mobilization strategy will ensure compliance in the gold mining industry as the sector is tainted by uncultured smuggling.

He said the first gold mobilization exercise for 2022 saw gold deliveries to FGR increasing by over 20 per cent.

“It is through efforts like this gold mobilisation that we can ensure compliance in the gold mining sector, ensure growth and reach national targets. Following the first 2022 gold mobilization exercise which was done, there was a 20.5 per cent gold increase to FGR for the month of May 2022. Stakeholders however still believe and we believe that this delivery falls short of gold produced in Zimbabwe due to side marketing,” Engineer Tahwa said.

According to FGR official results, gold deliveries in May increased by 79.5403 per cent to 2994.7512  Kgs from 1668.0102 kgs and 20.6874 per cent increase from 2481.4112 kgs in April 2022.

Speaking at the event, the Minister of Mines and Mining Development said the Gold Mobilization National Taskforce was a key strategy to ensure gold was delivered to Fidelity.

He also encouraged the taskforce team to come up with strategies to ensure that the mining industry achieves the Ministry’s 2022 gold target of 60 tonnes of gold deliveries.

He said although the industry did well last year by achieving a milestone of 32 tonnes of gold deliveries, a lot needed to be done to ensure that the country achieves its target.

“We are coming from a situation where we have a 2030 vision of Zimbabwe being a middle-income economy. We have at the same time, the mining industry targeting to achieve US$12 billion and we are definite that we will achieve it by the end of next year. Specifically, today we are talking about gold and specifically gold mobilization. In his words and remarks, the Permanent Secretary said gold mobilization is a key strategy to ensure that gold is delivered to Fidelity Gold Refiners (FGR).

“Taking a step back, last year we did well, 32 tonnes was good but it does not represent the full potential which the industry can deliver. What is important to us as key stakeholders is to come up with strategies on how we can improve from 32 tonnes to 60 tonnes.

“What is important after this gold mobilization exercise, is for teams to come up with strategies on how we can come up with strategies to achieve 60 tonnes this year,” Minister Chitando said.

Rushwaya cleared on US$5000 bribery allegations

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Rushwaya cleared on US$5000 bribery allegations

Zimbabwe Miners Federation (ZMF) President Ms Henrietta Rushwaya has been cleared of any wrongdoing in a case she stood accused of offering a US$5,000 bribe to an airport official in a bid illegally pass through a checkpoint with 6kgs of gold.

Harare Magistrate Learnmore Mapiye ruled that the State’s case was too weak for any reasonable court to convict.

Speaking after the ruling Rushwaya’s lawyer Mr Peter Pathisani said it was a happy day for his client as the matter had been sensationalised from the day Rushwaya was arrested.

“Our client has been acquitted. The court made a finding that the state had failed to prove its case beyond reasonable doubt that is the essence of the acquittal for the accused person. You would note that just looking at the evidence in total that the state accused before the court, it was not striking evidence convincing enough that they had a case against our client. Which is why we saw it that even she then goes on the stand to give her defence, her side of the story, it was just going to give a final blow to the state case which already was very weak. Yes of course we had to go on our defence to explain why, 1. It was not in dispute that we were at the airport on the day. 2. It was also not in dispute that gold was discovered in her bag. But the charge that we were facing was one of bribery and the state had to prove that indeed our client offered the alleged bribe amount. But the state failed to prove that evidence with the witnesses that it called before the courts. There it is a good judgement, its a good day for justice especially for our client as you know the matter has been sensationalised from the day that she had been arrested so as a result its a happy day for our client,” Pathisani said.

During trial, Rushwaya testified that when she realised that she had carried the wrong bag, she asked the police to accompany her to her house to collect the correct bag which the police allegedly later collected upon her arrest.

“As we speak both of the similar bags are at the police station,” Rushwaya added.

Rushwaya also told the court that witnesses might be lying against her as a result of external forces who might want to tarnish her reputation and inorder to ruin her chances of remaining ZMF President in future elections.

BREAKING: Henrietta Rushwaya acquitted

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BREAKING: Henrietta Rushwaya acquitted

Henrietta Rushwaya has been acquitted of allegations of offering a US$5000 bribe to a Civil Aviation Authority of Zimbabwe (CAAZ) official in a bid to smuggle gold to Dubai.

According to Rushwaya’s lawyer, the state failed to prove its case beyond reasonable doubt leading to Rushwaya‘s acquittal.

Get follow up on the story HERE

FULL SPEECH: Gold sector outlook address and strategic interventions

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FULL SPEECH: Gold sector outlook address and strategic interventions

Full speech by the Minister of Mines and Mining Development (MMMD) Hon Winston Chitando at the send-off of the Gold Mobilisation National Taskforce.

 

  1. It is indeed my distinct pleasure and honour to be at this memorable event as we witness the sending off of our competent men and women into three of our country’s provinces to carry out the 2022 Second Gold Mobilization Exercise.
  2. As you may be aware ladies and gentlemen, the mining sector is expected to play a pivotal role in the attainment of the country’s vision of being an Upper Middle Income Economy by 2030 as enshrined in the National Development Strategy1 (NDS1) (2021-2025). The main minerals that are going to lead growth of the mining sector include gold.
  3. As part of the gold development strategy being pursued by the Ministry, quarterly gold mobilisation programs will push the thrust towards mobilising gold deliveries to Fidelity Gold Refinery.
  4. Vision 2030 of becoming an Upper Middle-Income economy is anchored on the USD 12 Billion mining industry by 2023 Ministry’s set milestone as espoused in His Excellency, the President of the Republic of Zimbabwe, Cde. Dr. E. D. Mnangagwa’s USD 12 billion mining industry roadmap launched in October 2019.
  5. The gold sector in Zimbabwe has proved to be strategic to the mining industry and the national economy at large. Gold has remained one of the major foreign currency earners in Zimbabwe and is expected to contribute USD4 Billion to the USD12 Billion milestone. In this regard, our envisioned output for the gold sector is a sustainable annual gold production of 60 tonnes of gold by 2023.
  6. His Excellency, the President of the Republic of Zimbabwe, has implored us to work hard towards achieving the vision of an Upper Middle-Income Economy by the year 2030. We can achieve that through ensuring a sustainable gold mining industry given the value we can gain from this mineral.
  7. I am pleased to say that in 2021 Gold delivered to Fidelity Gold Refinery was 29.6 tonnes. This was a marked increase from the 19 tonnes produced in 2020. Looking at the current production in 2022, gold producers have delivered a total of 18.94 tonnes of gold to Fidelity Gold Refinery (FGR) for the period January to July 2022, an increase from last year’s production of 12.78 tonnes during the same period. A marked increase in gold deliveries to FGR was noted from small scale miners for the same period comparing 2021 and 2022, with deliveries of 6.75 tonnes and 12.5 tonnes respectively. That represents a significant increase of 85%.
  8. This is a very positive outlook from the gold sector and gives us confidence that if we maintain the same delivery rates to FGR, then our targets are well in sight.
  9. Despite the increase in gold delivery, it is widely believed by stakeholders that these deliveries fall short of possible gold produced in Zimbabwe during this period due to rampant side marketing, which calls for enhanced compliance enforcement in the sector. The country is rich in gold deposits and we strongly believe our production can reach 60 tonnes by 2023. However, key to realising this target is the plugging of side markets which are a pariah to our efforts in the mining sector and to the development that we hope to see achieved.
  10. To enhance the growth of the gold sector, the following initiatives are being carried out ;
  • Formalization of ASM Sector
  • The Establishment of Gold Services Centers
  • Resuscitation of Closed Mines
  • Opening New Ground for Pegging
  • Capacitation of Small-Scale Miners through various initiatives (FGR, ZSM, Development Fund, MILF)
  • Development and Implementation of the Gold Development Policy
  • Development of the SI on Portable Hammer Mills
  1. It is a privilege indeed to stand here and address you all, ladies and gentlemen, and to share with you the hopes and vision that we have for the mining sector and the country as a whole. I would like to conclude by emphasising the role that you are playing in conducting this Gold Mobilisation Exercise.
  2. We salute you and we hold the confidence that the exercise will be a fruitful one and you will be back home safely after executing the monitoring and surveillance exercise out there. Please bring back the insights and let us continue to work together to see that we move our country towards an Upper Middle-class Economy by the year 2030.
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