Fidelity Printers and Refiners official gold buying prices Monday 27 July 2020
SG 90% AND ABOVE $54.73/g
SG ABOVE 85% BUT BELOW 90% $53.81/g
SG ABOVE 80% BUT BELOW 85% $52.59/g
SG ABOVE 75% BUT BELOW 80% $51.98/g
SAMPLE BELOW 10g BUT ABOVE 5g $53.20/g
FIRE ASSAY CASH $55.03/g
Cash available. Fidelity Printers and Refiners prices will be changing daily in relation to world market prices.
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Minister of Mines and Mineral Development Winston Chitando shocked stakeholders attending a parliamentary meeting review of mines and mining development legislation and policies after professing ignorance on the Extractive Industries Transparency Initiative (EITI), which civic society is pushing to curb rampant leakages and boost investor confidence in the sector.
The meeting was organised by the Parliamentary Portfolio Committee on Mines and Mineral Development to review legislation and policies governing the mining industry and was attended by various stakeholders including civil society and mining communities.
Responding to a question from the Zimbabwe Environmental Law Association (ZELA) director Mutuso Dhliwayo on progress government made in the adoption of EITI, Chitando said he did not know about it.
“I will be very honest… I said what is EITI? I don’t know it,” he said.
Ironically, the top executive of EITI board visited Zimbabwe early this year to assess preparedness towards domesticating the initiative and interacted with government officials including Chitando.
Chitando was called to order by the Speaker of Parliament Advocate Jacob Mudenda accusing him of sending conflicting messages, as the 2020 national budget statement presented by the Ministry of Finance acknowledged the prudence of joining EITI.
“We don’t want government to be giving conflicting positions. Our Minister of Finance announced in the 2020 national budget statement… he said the country was ready to join… as a way of enhancing transparency and curbing corruption activities in the sector that may deter investment,” said Mudenda.
Chitando then quickly made a climb down indicating that he had in actual fact even met with the EITI board, but went on to characterise the transparency initiative as a difficult concept to adopt locally.
He said while he knew the EITI there was need for all stakeholders, including Chamber of Mines, Miners Federations, civic society players and government to have a comprehensive understanding of the process.
“EITI is a big beast, it’s a big animal let’s have a proper roll out on the implementation which needs a proper comprehensive overview and study by all stakeholders to say what does EITI say, how is it implemented.
“I had said I don’t know what EITI is but I know what it is, but we need an overview by all stakeholders. All stakeholder will need to have a structured way on the development and roll out of EITI,” he said.
ZELA deputy director Shamiso Mutisi said the remarks and attitude displayed by Minister Chitando does not bode well with the thrust of civic society seeking to promote a transparent and accountable extractive sector.
Mutisi said this resistance of transparency and accountability in the mining sector, which appears systemic, has a legacy in the Ministry as previous efforts to domesticate the EITI failed to bear fruit.
Mutisi said previous futile efforts to domesticate the initiative under the Zimbabwe Mining Revenue Transparency Initiative faced resistance from the same ministry during the Government of National Unity (GNU).
He however said recommendation by Speaker of Parliament, for the Mines and Finance ministry to jointly asses the initiative, was a key action point which gives confidence that the august house is keen to promote EITI.
On the futile ZMRTI, Mutisi contended that those efforts despite failing, can provide source documents, provide a building block towards a comprehensive study and multi stakeholder engagement.
“That statement does not bode well for what we are pushing. It’s an admission that there is need to understand better what the EITI is all about, what advantages it comes with and what are some of the pitfalls.
“It also indicates that there is some sort of resistance from the Ministry of Mines but we are at least happy that he said the next course of action is a comprehensive study of how Zimbabwe can better understand the EITI or even apply if they chose to go for it.
“That recommendation from the Speaker that the two ministries should meet and discuss and report back to parliament is a key action point, it shows that Parliament is keen to promote EITI or encouraging the country to adopt it,” said Mutisi.
The EITI is an international, multi stakeholder initiative that promotes transparency and accountability in the oil, gas and mining sectors through the disclosure of government and company data in resource-rich countries.
263 Chat
A Zimbabwean woman Linda Katiyo has been sentenced to 10 years in jail for smuggling explosives used in illegal mining.
Katiyo, was handed the sentence in the Musina Regional Court, South Africa on Thursday, Hawks spokesperson Captain Matimba Maluleke said.
On 28 April 2019, Katiyo, 38, was en route from Zimbabwe to Gauteng, South Africa when she arrived at the Beitbridge checkpoint with a “suspicious-looking bag”, Maluleke said.
“The border police became suspicious and thoroughly searched the bag and found miscellaneous explosives used for illegal mining,” Maluleke said.
The explosives had an estimated value of R1.2 million.
“The Hawks is determined to deal with cross-border crimes, particularly at the ports of entry,” Maluleke added.
The Hawks are South Africa’s Directorate for Priority Crime Investigation (DPCI) which targets organised crime, economic crime, corruption, and other serious crime referred to it by the President or the South African Police Service (SAPS) set up by the Zuma administration in 2008.
The Citizens
WAGE negotiations between the Chamber of Mines and the Associated Mine Workers’ Union of Zimbabwe (Amwuz) have hit a deadlock over a demand by mine workers to have 60% of their minimum wage paid in foreign currency amid threats of a strike, business digest has learnt.
The negotiations are being held amid a deepening economic crisis characterised by a crippling liquidity crunch, acute foreign currency and fuel shortages, low capacity utilisation, dwindling investment inflows and runaway inflation which has surpassed the 700% mark decimating pensions and incomes. This has been worsened by the advent of the coronavirus pandemic which has wreaked havoc on economies and has resulted in more than 600 000 fatalities globally. Zimbabwe has recorded 26 deaths.
The two parties met on Tuesday this week with the mineworkers demanding that all exporting companies pay 60% of the minimum wage in foreign currency with non-exporting mining companies paying the entire minimum wage in local currency. The minimum wage they had agreed is ZW$14 000.
Amwuz president Tinago Ruzive told businessdigest yesterday that the employers’ body has backtracked on its initial agreed position to pay at least 50% of the minimum wage in foreign currency.
“We met on Tuesday thinking that we were close to an agreement. We had agreed in a previous meeting on a minimum wage of ZW$14 000 and had also agreed that 50% of that will be paid in foreign currency by mines that export. However, the employers somersaulted on Tuesday, saying they cannot pay part of the wages in forex.
We were shocked,” Ruzive said. “It was a very tense meeting. Mineworkers are now threatening to down tools over this.”
However, Ruzive emphasised that the threat by its constituency to go on strike was just “a bread-and-butter issue” and had no connection to the planned protests against the government by anti-corruption campaigners on July 31.
Ruzive said the two parties will meet again on Tuesday next week where they will “try to find each other” and avert a strike which could have a devastating impact not only on the mining sector but also the economy.
The demand for foreign currency wages by the mineworkers is part of a nationwide push by workers for a living wage.
This demand has been prompted by the weakening of the Zimbabwean dollar, which is earned by the majority of workers. The local unit has rapidly depreciated at a time the prices of basic commodities have skyrocketed as retailers index the price of their products against the greenback. The government banned the multi-currency regime and made the local unit the sole legal tender in June last year through statutory instrument 142 of 2019.
However, it has backtracked on this, allowing the use of the greenback for domestic transactions.
BusinessDigest
ZIMBABWE Consolidated Diamond Company (ZCDC) acting chief executive Roberto De Pretto last week said he was shocked by the level of poverty and underdevelopment in Chiadzwa despite being endowed with one of the largest diamond deposits in the world.
De Pretto made the remarks during a stakeholders meeting in Mutare which was hosted by the Parliamentary Portfolio Committee on Mines and Mining Development.
He said almost 15 years after diamonds were discovered in Chiadzwa, the area still had no running water and poor roads while children still walked long distances to school.
“It is disheartening to walk past Chiadzwa, the area is still underdeveloped since 2005 when diamonds were discovered in Marange,” he said.
“It is a shock to me that there is no development despite that Chiadzwa fields have one of the largest diamond deposits in the world, there is no running water, poor roads, while children are walking long distances to go to school,” the ZCDC boss said.
De Pretto called for crafting of a diamond policy with a clear mandate for miners to uplift surrounding communities.
“The diamond policy should be very clear on the rehabilitation of areas where diamond companies are operating, companies should be held accountable over land degradation,” he said.
Speaking to Newsday Weekender, Bocha Diamonds Development Trust board chairperson Lovemore Makwada said: “It’s very unfortunate that these workshops have been held over and over again, coming up with resolutions, but we are still poor in Marange, we are now worried which step we should take to help in the development of Chiadzwa community.”
Zimbabwe’s sole gold buyer and exporter Fidelity Printers and Refiners (FPR) has made major strides further in
unravelling issues of gold leakages by presenting an alluring gold purchasing price which miners have effectively
welcomed as just and long overdue.
By Rudairo Mapuranga
Recently, the Minister of Finance and Economic Development Prof Mthuli Ncube said that the country was losing close to 34 tonnes of gold through smuggling to South Africa.
The leakages of gold are credited to the previous price regimes that were unpopular to the miners which in turn led miners to sell the yellow metal to unlicenced buyers who would smuggle the metal to neighbouring South Africa.
Friday turned into jubilation for the miners when Fidelity at long last adjusted prices and changed their fixed value purchasing model to one that currently tracks the worldwide gold value developments.
According to Zimbabwe Artisanal and Small Scale Miners Council former President Engineer Chris Murove the move will affect gold conveyances to the sole gold purchaser and exporter if it is maintained.
“This is indeed commendable and will have a huge positive impact on the ASGM sector going forward, provided this new and fair pricing regime is maintained” Murove Said.
Zimbabwe Miners Federation President Ms Henrietta Rushwaya also endorsed the price regime saying it was going to deal with gold leakages and selling of gold on the parallel market. Rushwaya also said that the move is going to boost investment in the gold sector by attracting investors to trade in gold since the Zimbabwe Stock Exchange has been suspended by the government.
“The new gold price model is most welcome and was long overdue. The prices which will be changing daily inline with the floating world market prices will see a considerable increase in production as well as an increase in deliveries to Fidelity as there is now no real incentive to smuggle or to deal on the parallel market (hoping that
payments for deliveries are made out without delay). The decision has also come at a time whereby the ZSE has been suspended and most investors who are active on the bourse will be looking for alternative investment avenues. I’m assuming this will probably see more investment into the sector.” Ms. Rushwaya said.
Engineer Murove also encouraged Fidelity Printers and Refiners to set floor prices that will encourage miners to sell even when global gold prices are on the decrease.
“It would also be good and strategic if, in support of the ASGM sector, the RBZ were to set a floor price that even if the world price were to go below for whatever reason, loyal miners who consistently deposit their proceeds into Fidelity will be able to enjoy and can plan their investment projects upon. Such a move will build lasting relationships between Fidelity and gold miners which will weather all storms. Some food for thought.” Engineer Murove said.
Gold is currently Zimbabwe’s biggest foreign currency earner and economic experts have predicted that the yellow metal has a potential and muscle to resuscitate the economy of Zimbabwe through funding all Agricultural projects in the country.
This article first appeared in the Mining Zimbabwe weekly 20 July 2020 issue
THE Ministry of Mines and Mining Development has deployed resources to provinces in a bid to clear title issuance backlog which is now making it difficult for one to get a licence on application submission.
By Dumisani Nyoni
The Ministry has been struggling to issue mining titles on time, a situation that was now breeding illegal miners, reducing the flow of gold through formal channels like the Fidelity Printers and Refiners.
The process was taking several years in some mining provinces, with torn and obscure maps causing several mining disputes.
It could be noted also that the lack of registration certificates causes miners to channel their gold through the black market, which is not good for the growth of the mining industry and the economy.
In an interview with this publication, Mines and Mining Development deputy minister Polite Kambamura said the ministry was working flat out to clear the title issuance backlog.
“The ministry is currently working to clear the title issuance backlog, which makes it difficult for one to get a licence on application submission. We are, however, putting resources to provinces to expedite the whole process,” Kambamura said.
Quizzed to reveal the type of resources he was talking about, Kambamura said: “We are talking of human resources, vehicles, fuel, maps etc.”
On corruption reports allegedly involving Mines Ministry officials, he said if there were “any specific corrupt allegations then reports should be brought forward.”
There have been several corruption reports whereby Provincial Mining Directors (PMDs), though armed with full knowledge on the ownership of mine claims in the country, deliberately re-allocate mine claim certificates to their loyal syndicates who either give them cash upfront or a percentage of the loot.
The small scale miners in Midlands Province accused the Midlands PMD Nelson Munyanduri and the national office of operating a well-orchestrated conspiracy of deceit, fraud, misrepresentations, chicanery and double-dealing after he double allocated a mining certificate on disputed land, according to Zim Morning Post, an online publication.
Corruption, if not addressed, will cost the nation millions of dollars.
It also undermines President Emmerson Mnangagwa’s vision of building a US$12-billion mining sector by 2023.
Under the US$12 billion mining roadmap, gold is expected to contribute US$4 billion, platinum US$3 billion while chrome, iron, steel diamonds and coal will contribute US$1 billion.
Mining sector generates over 60% of Zimbabwe’s export earnings and accounts for between 12% and 16% of the GDP as of October 2018.
This article first appeared in the Mining Newsweek 20 July 2020 issue
FINANCE Minister Mthuli Ncube has said mining legislation needs to be reviewed in order to ensure transparency and curb leakages in the mining sector, enhance exploration of the country’s minerals, and computerisation of mining which is expected to solve issues of mining titles.
Ncube said this in the National Assembly last week during his midterm budget and economic review statement where he also said that the mining sector in Zimbabwe is now the biggest foreign currency earner at 60% of total foreign currency received.
While Ncube has emphasized on mineral legislative reforms, the stumbling block to a new Mines and Minerals Amendment Bill has been the slow pace in its drafting by the Attorney General’s office so that it can be crafted by Parliament.
The mining sector is said to currently contribute about 8% of total Gross Domestic Product and is expected to experience a boom of S$12 billion by 2023 from US$2, 7 billion in 2017.
However, he said mining currently faces a myriad of problems that include low production levels due to COVID 19, gold leakages due to pricing issues, closure of international ports, power and fuel shortages.
“Priority policy areas to attain this target and other Transitional Stabilisation Programme benchmarks include reviewing and updating mining legislation, enhancing exploration and investment in mining, modernisation, and computerisation of the mining title administration (mining cadastre), improving transparency in the mining sector and value addition of minerals to create more jobs and earn more foreign currency are priorities for the sector,” Ncube said.
He said due to COVID 19 impacts, and other challenges such as energy, the mining sector is projected to slow down by -4, 1%.
“Therefore, growth for the mining sector is now projected to slow down to -4.1% in 2020, reflecting the impact of COVID 19 and other challenges including perceptions around retentions, erratic power supply, and loss of skills in the mining sector.”
Ncube said the government will also deal with issues of mineral leakages that continue to deprive the country of substantial foreign currency inflows.
“Therefore, during half of the year and going forward, the budget will expend more resources on capacitating security institutions engaged in monitoring and curbing mineral leakages. This will also prioritise the Minerals and Border Control Unit,” he said.
For most minerals like chrome, coal, and nickel, Ncube said their production was affected by COVID 19, but coupled with other challenges such as power and fuel shortages.
“Chrome was affected by logistical challenges in South Africa under lockdown and closure of some docking ports considered unsafe in China due to the pandemic weighed down on raw chrome exports to China. Disruption of supply components and spare parts forced most smelters to gradually scale down operations and put plants on care and maintenance.
“Other challenges that include power and fuel shortages, high operational costs due to surging inflation also continued to weigh down chrome output,” Ncube said.
For coal, he said the 2020 output is projected at 3 million tonnes, constrained by reduced investment in exploration, shortages of fuel and foreign currency challenges.
“In addition, the (coal) industry players contend that low foreign currency retention thresholds (45%) for an industry which exports only 10% of the produce, is making it difficult for the industry to procure production inputs. This is in addition to other challenges that include fuel shortages and high operation costs induced by rising inflation, among others.”
The Finance Minister said coal output was about 417 000 tonnes in the first quarter of 2020 from two major producers and about 16, 6% more than production realized during the same period in 2019.
But he said the price of coal of about US$30, 30 per tonne was unviable and below the average cost of mining.
For chrome, he said the output in the first quarter of 2020 stood at 293 000 tonnes, about 30% lower than in the same period last year due to a steep decline in ferrochrome prices.
Ncube said diamond output in the first quarter of 2020 surpassed the same period last year by about 17% due to increased production at the Zimbabwe Consolidated Diamond Company (ZCDC).
“However, the subsector faces challenges on power supply, COVID 19 impact on production, demand, and hence depressed prices.”
For Gold, Ncube said gold prices underperformed due to increased leakages amid high production through smuggling and diversion of gold to the informal market arising from issues around retentions that have since been revised.
“Against this background, gold deliveries are projected at 27 958 kilograms for the year 2020, which is lower than the 2019 levels despite the favourable international prices obtaining compared to the previous year,” he said.
Ncube said the government will continue to engage mining companies including small scale miners on pricing and viability issues.
This article first appeared in the Mining Newsweek 20 July 2020 issue
The government last year launched a strategic roadmap to the achievement of a US$12 billion mining industry by 2023 as it ramps up efforts to increase the sector’s contribution to the economy.
By Dumisani Nyoni
Under the US$12 billion mining roadmap, gold is expected to contribute US$4 billion, platinum US$3 billion while chrome, iron, steel diamonds and coal will contribute US$1 billion.
Lithium is expected to contribute US$500 million while other minerals will contribute US$1,5 billion.
To achieve this target, the following should be improved to complement government efforts and increase gold submissions.
The Ministry of Mines and Mining Development has been struggling to allocate mining titles to prospective miners, breeding illegal miners, and reducing the flow of gold through formal channels like Fidelity Printers and Refiners (FRP) in the process.
Zimbabwe Prospectors Association president Samson Dzingwe recently told private media that the delays in the issuance of mining certificates create a conducive environment for red tape or corruption, which is an enemy of economic growth.
If the government, through the Ministry of Mines and Mining Development, could speed up mining title allocations, gold deliveries to FPR would increase significantly.
The Gold Development Initiative Fund (GDIF) which is administered by FPR was created by the Reserve Bank of Zimbabwe as part of its initiatives to enhance economic productivity through the promotion and development of the gold mining industry in Zimbabwe. The loan facility is primarily for the acquisition of gold mining plants and equipment to enhance gold production by miners. However, some of the fund requirements are deterrent to small scale miners, hence they should be eased.
For instance, for small scale miners to access it, they should produce a geological report, mine production history, life of mine plan, Environmental Impact Assessment (EIA Certificate), site of works plan/surface plans, due diligence report, bankable document, financial statements of the applicant for the previous 2 years, latest management accounts, asset register, tax clearance certificate, cash flow projections to cover the tenure of the loan & assumptions used, debtors & creditors age analysis and quotations.
We believe if some of the Fund requirements were eased, small-scale miners would be able to access it and use the money to break production records and deliver more gold to FPR.
FPR should employ its own gold buying agents and have them deployed in all gold producing provinces across the country. This will go a long way in enhancing transparency and accountability in the buying of the yellow metal. Illegal buyers create relationships with ASM something the sole buyer needs to start doing. Currently, a permit to buy gold is only issued to large scale gold buying agents who own mining operations producing at least fifty kilograms of fine gold per month.
Small scale gold buying agents are supposed to enter an Agency Agreement with FPR before being issued with a permit with clearly spelt out terms and conditions.
Given, FPR has gold buying centres around the country but more are needed. The country’s sole gold buying unit should consider partnering institutions like Zimpost for convenience’s sake. This will make it easy for miners to sell their gold, improving gold deliveries in the process.
Failure to pay miners on time is a recipe for disaster as it encourages miners, especially small-scale miners to sell their gold to the black market where payments are made instantly. Of late, FPR has been struggling to pay for gold delivered to it on submission due to foreign currency shortages. It blamed the COVID-19 pandemic which reportedly disrupted cash movement.
With corruption continuing rearing its ugly head and threatening one of the country’s foreign currency earners—gold sector—Zimbabwe should forget achieving the US$12 billion mining industry by 2023. Serious corruption cases involving officials in the Ministry of Mines and Mining Development who are allegedly causing man-made disputes in mining towns occurring around the country due to deliberate double allocation of registration certificates have been reported but with little action on the part of the government.
The government has announced its plans to migrate from the current manual to the more efficient and computer-based cadastre system in the administration of mining title but the pace by which the process is taking is not encouraging. Hence, it should be speeded up.
A cadastre is normally a computer-based and up-to-date land information system containing a record of interests in land such as owners’ rights, restrictions, and responsibilities. The current manual system has an outdated ownership database and is blamed for widespread disputes over claim boundaries.
Recently, local mining equipment suppliers told this publication that they were facing serious viability challenges stemming from currency volatility, cheap imports from China, and forex shortages to import raw material among others. In their submission, they called upon the government to support them by protecting them from cheap imports from China. For instance, Yagden Engineering managing director Wayne Williams, whose company deals with steel fabrication, mining equipment, machining, and milling equipment, suggested imposition of higher duties on equipment supplied by the Chinese.
It could be noted that mining equipment suppliers are an important sector driving the mining sector. Therefore, the support given to this sector will go a long way in boosting gold production in the country.
There are many land disputes in Zimbabwe, some of them caused by a lack of coherence between various government ministries and departments. To avoid land conflicts, a committee including officials from the Agriculture Ministry, local councils as well as Local Government Ministry should be set up.
• MMCZ intensifies monitoring and inspection
STAFF REPORTER
Zimbabwe is being robbed of millions worth of chrome through a complex smuggling syndicate involving Chinese who have been under-declaring volumes of chrome supported by a number of unscrupulous Zimbabwe Revenue Authority (Zimra) and Minerals Marketing Corporation of Zimbabwe (MMCZ) officials.
Information gathered points to the fact that the chrome that is being declared at various weighbridges owned by MMCZ across the country does not tally with the volumes of chrome exported through the borders.
A well-placed source with MMCZ said the state-owned minerals marketer has been receiving reports of possible rampant smuggling of chrome through under-declaration.
“The country has been losing millions through this cartel of chrome smugglers who are working with Zimra and MMCZ officials. This has been going on for some time but no concrete action has been made to monitor how much chrome goes through weighbridges and how much is then declared to the Reserve Bank of Zimbabwe through CD1 forms.
“MMCZ just recently received reports of chrome that was being smuggled through the border especially the Forbes Border Post. This carted has mainly been driven by Chinese that are into small scale chrome mining,” said the source.
The continued smuggling of chrome has pushed MMCZ to set up more weighbridges across the country to curb this scourge. Also involved in this smuggling scam are government top officials.
MMCZ general manager Tongai Muzenda told Mining Zimbabwe that the state minerals marketer has intensified its monitoring systems to bust any possible leakage of minerals, especially chrome.
This has seen MMCZ increasing the number of its monitoring team to physically man all mining sites across the country.
“We have heard about those reports but some just come as rumours but as MMCZ we have taken an initiative of intensifying our monitoring systems. This has seen us increase the number of people by six,” Muzenda said.
In February this year, a Mutare-based official was arrested on allegations of attempting to facilitate the smuggling of a truckload of chrome ore to Mozambique. The chrome intercepted had a value of roughly US$25 000.
On the side of Zimra, its officials are also accused of being complicit in carrying out export duties while issuing fraudulent bills of entry.
A World Bank report dubbed “The Changing Wealth of Nations 2018”, documents Africa’s impoverishment by the rampant extraction of minerals, oil and gas.
In the report, the bank concludes that sub-Saharan Africa loses about $100-billion worth of adjusted net savings annually through massive looting of minerals.
It is “the only region with periods of negative levels — averaging negative three per cent of gross national income over the past decade — suggesting that its development policies are not yet sufficiently promoting sustainable economic growth and clearly, natural resource depletion remains one of the key drivers of negative adjusted net savings in the region.”
This article first appeared in the Mining Newsweek 20 July 2020 issue
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