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Gold steady but held close to its lowest in 2wks

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Gold steady but held close to its lowest in 2wks

Gold steadied today, but held close to its lowest in two weeks, as the U.S. dollar recouped losses thanks to stronger-than-expected U.S. economic data.

Spot gold was up 0.1 percent at $1,314.35 per ounce as of 0129 GMT, after touching its lowest since Feb. 15 at 1,312.15 in the previous session.

U.S. gold futures were flat at $1,315.80 an ounce.

The dollar, which pulled back from over three-week lows, was up 0.1 percent against major currencies.

U.S. gross domestic product increased at a 2.6 percent annualised rate in the fourth quarter, above economists’ forecasts for a 2.3 percent gain.

Asian shares inched higher on Friday with broader gains capped by investor caution as concerns about China’s economy and global trade weighed on sentiment.

Factory activity in China contracted to a three-year low in February as export orders fell at the fastest pace since the global financial crisis, highlighting deepening cracks in an economy facing weak demand at home and abroad.

U.S. President Donald Trump warned he could walk away from a trade deal with China if it were not good enough, even as his economic advisers touted “fantastic” progress towards an agreement to end a dispute with the Asian country.

A second summit between Trump and North Korean leader Kim Jong Un collapsed over sanctions, and the two sides gave conflicting accounts of what happened, raising questions about the future of their denuclearisation negotiations.

China’s leaders will pledge in parliament next week to keep the country on safe footing as the economy faces its biggest test in years, amid pressure to roll out more measures to bolster growth and revive weak business and consumer confidence.

Indian military officials said they welcomed Pakistan’s planned return of a captured pilot, but refused to confirm they would de-escalate a conflict between the two nuclear powers.

South Africa’s labour court has ordered a mineworkers’ union to suspend its plans for an industry-wide strike from Feb. 28 to March 7 until it issues a ruling on whether to block the action.

Two of Ecuador’s five mines in development are on track to start producing copper and gold in the fourth quarter of 2019 in line with plans, a senior government official said in an interview.

The U.S. Mint sold 12,500 ounces of American Eagle gold coins in February, down 81.1 percent from the previous month, according to the latest data.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.52 percent to 784.22 tonnes on Thursday._Reuters

Palladium gaining ground

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Palladium gaining ground

For the first time in more than a decade, palladium is rivalling gold in value.

At its current spot price of just over US$1 300/oz, reaching as high as $1 400/oz in January 2018, it has truly become the most precious of the precious metals.

Demand has been primarily driven by the automotive industry through the “demonisation” of diesel engines in Europe.

The resultant growth in small petrol engines and hybrid engines, which are fitted with emission-reducing catalytic converters that require it as a catalyst to control pollution, along with the shift away from diesel engines, has benefitted the material.

Moreover, the Volkswagen emissions scandal has negatively impacted the European diesel market and platinum prices.

According to Michael Jones, the President and CEO of TSX-listed Platinum Group Metals, the developer of the Waterberg palladium-dominant project in South Africa, it has become apparent that the electric vehicle revolution has been a major factor driving demand.

While adoption rates of electric vehicles are expected to increase anywhere between 8 percent and 10 percent by 2023, Jones stresses the importance that at least half of these new electric vehicles will be hybrid electric vehicles as opposed to full electric vehicles and will therefore still require the use of palladium in the catalytic converter.

Moreover, China’s tougher new vehicle emissions standard, the China VI emission standard, released in June 2018, means that cars will require more robust catalytic converters that are able to meet the new emissions legislation – another factor that may require increased palladium during manufacture in order to minimise emissions.

According to data from German chemicals giant BASF, the China VI emission standards is expected to create an additional 1 Moz of palladium demand annually by 2020, which Jones believes the market is already experiencing.

From the 2.2 Moz of palladium estimated to be required in the manufacture of Chinese cars in 2018, palladium demand is estimated to grow to 3.1 Moz by 2020, says BASF.

These figures are not based on the amount of new vehicles, but rather the impact of the change in the standard for emissions which will require increased amounts of palladium in its manufacture to ensure the longevity of the catalyst.

While Jones notes that this may cause car manufacturers to substitute out of palladium back into platinum as a cheaper alternative, it may take several years for this change to come into effect and have a physical impact on the price of palladium.

This being said, palladium is also a much more attractive metal for autocatalysis, particularly in hybrid (petrol) electric vehicles, he adds.

Moreover, with palladium being relatively rare, mined mainly as a by-product of nickel and platinum mining, it may take a while for demand fundamentals to slow should catalytic converter demand slow, says Jones.

This increasing demand, combined with constrained long-term supply, has caused a deficit in palladium supply which has been the key driver in palladium’s high prices – a price trend which experts expect to continue.

Despite weakening automotive sales in key markets, stringent emissions controls are expected to sustain demand as governments seek to improve their emissions targets.

Jones expects this demand to continue well into the foreseeable future due to tight supply. — Mining Review Africa

RBZ bends on 30-day retention period

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RBZ bends on 30-day retention period

The Reserve Bank of Zimbabwe will allow exporters to keep part of their export proceeds before compulsory conversion to local currency for periods longer than the prescribed 30 days in exceptional circumstances where such need arises to avoid choking companies’ operations, Business Weekly can reveal.

This comes after central bank governor John Mangudya, indicated in the 2019 Monetary Policy Statement last week that exporters would be allowed to retain a prescribed percentage of their export proceeds in hard currency for only 30 days, after which the unused funds will be released onto the market at a prevailing exchange rate.

Mangudya floated the US dollar exchange rate against the RTGS dollar and other currencies within the multi-currency basket through the introduction of interbank market.

The interbank opened at 1:2,5, lower than average 1:3,5 on the parallel market thanks to the combination of official and parallel dollars..

Manufactures now retain 80 percent of their export proceeds; gold producers (55 percent); other minerals (50 percent); tobacco and cotton merchants, for input schemes (80 percent); tobacco growers; 50 percent, cotton growers; 30 percent while horticulture, transport, and tourism will retain (80 percent).

Non retained earnings converted

The balance, which cannot be retained at all, is immediately converted to RTGS dollars at the prevailing exchange rate upon receipt to improve liquidity.

The new retention thresholds have already taken effect and an exchange control directive has been issued.

“Companies will not be constrained (by the compulsory conversion to RTGS dollars) because there is an exchange control authority that is given to those people who are genuine,” Mangudya told Business Weekly in an interview yesterday.

“Where there are exceptions, they (exporters) are given that exchange control authority/ approval.

“Just like CD1 forms, we say people (exporters) must acquit in 90 days, but others don’t submit within that period because of certain challenges. The exporters know that there is a law (providing for that).”

Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe said while the retention thresholds are commendable, the 30-day period was too short.

“We understand the need for the 30-day window but we believe the ideal thing is to have a window of 90 days to 180 days,” said Jabangwe.

“It will give comfort to the depositor (exporter) that I will not be forced into expenditure.

“When people are forced to spend, they will spend irrationally, sometimes on raw materials and yet the liquidity for the company is not good.”

Hospitality Association of Zimbabwe (HAZ) president Innocent Manyera concurred with Jabangwe.

“Indeed, the wheel should be given time to turn. With the time period given, we might be faced with panic buying and unplanned expenditure might also end up affecting other cost line items.

“Cash flows are not that liquid. We need to spare for different expenditures without panic and captive expenditure,” Manyera said.

New measures a departure from the past

Mangudya said the latest policy position was in fact an improvement, given that before October 2018, companies could only retain their export proceeds for 14 days.

Economist Persistence Gwanyanya echoed Mangudya’s sentiments, saying the 30-day retention window is “just for regulation purposes, otherwise for genuine requests…extensions have always been granted.”

“What is important now is for banks to work closely with their clients to understand their cash flows as well as foreign currency requirements so that the seemingly shorter retention window doesn’t work against generators of foreign currency.

“We should understand that the bulk (85 percent) of the country’s foreign currency is generated by five commodities, which makes it imperative for RBZ to come up with more efficient and effective measures for this foreign currency to be accessible to other players in the market, and one such measure is the shorter retention window.

“But of course we need to get feedback from the market pertaining to this measure and if need be, it can be revised in a manner that balances the need to encourage increased foreign currency generation and its accessibility by the market,” Gwanyanya said.

He added that the move was necessary for the success of the interbank foreign exchange market.

Recently, the RBZ has come under fire from exporters who claim that the apex bank raided private accounts of exporters and used their funds.

Mangudya has fiercely denied the allegations.

Some exporters, including RioZim Limited, have gone to the point of filing litigation against the central bank over alleged denied access to export proceeds.

RioZim claimed it had not received significant amounts of its export earnings particularly over the period between 2016 and September 2018, amounting to nearly US$100 million.

Early this month, RioZim, a diversified miner listed on the Zimbabwe Stock Exchange which extracts gold at three mines in Kadoma, Chegutu and Masvingo, shut down operations for the second time in four months over delays in payments of the forex it was entitled to retain.

It has since resumed operations.

Business Weekly

Rio Tinto partying like its Christmas

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Rio Tinto partying like its Christmas

Rio Tinto’s (ASX, LON:RIO) investors will be celebrating Christmas in February, as the miner is giving them a $4 billion special dividend, or $2.43 cent a share, after posting its highest annual underlying earnings since 2014.

The world’s second largest miner reported Wednesday a 2% increase in underlying profit, up to $8.8 billion, beating market forecasts of $8.5 billion on the back of rising revenue of $40.5 billion. The special dividend also came after a string of asset divestments, including Rio’s entire interest in Indonesia’s Grasberg mine for $3.9 billion.

Shareholders will receive a special dividend worth $4 billion, or $2.43 cent a share, as Rio Tinto recorded its highest annual underlying earnings in the last five years.

Since Jean-Sébastien Jacques took the helm in July 2016, Rio has focused on cutting costs, generating cash and returning as much of it as possible to investors through dividends and share buybacks.

Last year, the company waved all its coal assets goodbye and is now the only major miner with a fossil-fuel-free portfolio. In total, Rio has sold $12 billion worth of unwanted assets since 2015.

But not all was rosy in the company’s 2018 results. The firm flagged a further delay from the $5.3 billion underground expansion of its Oyu Tolgoi copper-gold-silver mine in Mongolia. The expansion has now been scheduled for the third quarter of 2021.

Jacques also acknowledged the clouds currently casting shadows over the global economy, including the threat of a trade war between the U.S. and China, the main market for Rio’s iron ore.

“I believe common sense will prevail at some stage,”  Jacques said. “There is uncertainty around, but we are very well positioned. The only thing I can do is to make sure I have a business that is even stronger.”

Separately, Rio Tinto released a major report into its plans to transition into a low carbon future, and Jacques made a point of underlining its Environmental, Social and Governance (ESG) credentials.

The company also finally confirmed a promising copper find at its Winu project in Western Australia.

Mining.com

Barrick, Newmont step up game to sway top investors

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Barrick, Newmont step up game to sway top investors

Canada’s Barrick Gold (TSX:ABX)(NYSE:GOLD) and U.S. rival Newmont Mining (NYSE:NEM) are working hard on persuading their respective top investors that are merger of the companies is the best, or the worst, option for them.

The Toronto-based miner, which launched its hostile bid for Newmont on Monday, updated its presentation on Thursday, adding more information on the expected synergies and benefits of the deal.

Barrick chief executive Mark Bristow reiterated that acquiring the Colorado-based company would create up to $7 billion in synergies, with $4.7 billion coming from Nevada, where both companies have massive mines and exploration projects.

Bristow wants Newmont shareholders including BlackRock Inc., VanEck, and Flossbach von Storch AG to back its no-premium hostile bid for the miner.

According to Andrew Cosgrove, an analyst with Bloomberg Intelligence, the top 20 holders in Barrick, who own 55% of total shares outstanding, also own 91% of Newmont’s shares. So if Bristow’s power of persuasion works on them, Newmont will be forced to scratch its $10 billion agreement to buy Goldcorp (TSX:G) (NYSE:GG).

There’s no consensus about analysts about what the best outcome would be. For Michael Dudas from Vertical Research Partners, Barrick’s all share-no premium deal, currently priced at an 8% discount, may require a reset.

“Our view supports Newmont completing its Goldcorp proposed transaction, while looking to accelerate joint Nevada asset utilization discussions, structure and detailed plans while Barrick focuses on optimizing its newly combined global mining company,” Dudas wrote.

While the experts acknowledged that the synergy potential in Nevada for the companies could be “quite healthy”,  he said that the proposed arrangement “would heighten overall execution risks presented to a new management team in the early stages of integrating Barrick and Randgold’s portfolio.”

Rejection in the cards?

Vertical Research anticipates Newmont investors rejecting the hostile approach. “Hostile acquisitions have rarely been successful in the gold mining industry – especially in a smaller, more collegial sector,” Dundas said.

Analysts at Canaccord agree, adding that the potential benefit outlined by Barrick appeared to be too high, particularly in Nevada.

In its updated slide presentation titled “Capturing the Missing Billions,” however, Barrick argues that synergies “are the premium.”

“Newmont’s CEO admitted he hasn’t reviewed the opportunity since 2014, and only then a high level review for a couple of days,” the presentation says.

“Nevada JV is not the right path forward. [It] would not enable full realization of benefits due to duplicate administration, conflicting priorities and cumbersome governance,” Barrick notes.

“It might be hard for Newmont to swallow, but there’s huge synergies,” Robert McEwen, now the chairman and chief owner of McEwen Mining said in an interview this week. “But they’d also become such a mega producer – the distance between them and everybody else in the industry becomes a big question of, what happens next?”

A deal between the two world’s largest gold miners would create a billion-global mammoth, leaving Australia’s Newcrest Mining (ASX:NCM) as the world’s No.2 producer of the precious metal, with a current value of about billion.

It would also bring into question Barrick’s ability to integrate another miner, as the company has just completed the acquisition of Randgold.  The Canadian miner, however, highlighted it had outperformed Newmont by 20% since the move was announced in September.

Should Newmont’s shareholders choose to go ahead with the planned acquisition of Goldcorp instead, the Colorado-based firm would become the world’s biggest, with Barrick grabbing the second place and Newcrest the third.

Mining.com

RBZ calls on miners to increase production

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RBZ calls on miners to increase production

The Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya, has called on miners to ramp up production to compensate for potential declines in mineral prices.

Precious metal prices were generally subdued last year, occasioned by weak safe haven demand and a generally stronger dollar owing to interest rate hikes by the Federal Reserve during the year.

Mangudya said the developments “significantly” raised opportunity costs of holding precious metals such as gold and platinum.

Further, a general waning in global tensions diminished safe haven demand for precious metals.

Base metal prices, which firmed in the first half of last year, fell sharply in the second half following the imposition of broad-based tariffs by the United States on China’s imports.

Intensified trade tensions involving the two countries have raised market concerns about global trade and investment prospects, clouding the outlook for demand for most commodities.

Said Mangudya in the 2019 Monetary Policy Statement on Wednesday: “The moderation in commodity prices calls for increased production in commodity dependent economies such as Zimbabwe, so as to compensate for the potential revenue losses.”

Mineral revenue jumps to $3,4bn last year

Last year, the mining sector earned more than $3,4 billion, driven by high international metal prices and record breaking output particularly for gold, diamonds, chrome and nickel.

Minerals Marketing Corporation of Zimbabwe (MMCZ)’s corporate communications executive Pretty Musonza said the actual figures were not yet ready, but provisional figures point to “an increase from the 2017 figures”.

“The figures for last year have not been finalised. They should be ready in the near future,” said Musonza in a recent interview.

“However, I can confirm that indicative figures point to an increase from what the sector achieved in 2017.”

MMCZ, which was established through an Act of Parliament (MMCZ Act Chapter 21:04), is an exclusive agent for marketing and selling of all minerals produced in Zimbabwe except silver and gold.

The approximately $3,4 billion revenue generated last year represented a significant jump from the $2,3 billion raked in 2017.

Platinum Group of Metals (PGMS) matte rose 33 percent to 15 115 metric tonnes, and generated about $625,9 million.

Chrome concentrates output increased by 26 percent to 658 306mt and generated US$102,6 million with nickel output also rising by 9 percent to 61 073mt and raked $59 million.

With diamond output surpassing the 2,4 million carats target to end the year on 2,8 million carats, more money is expected from that sector and experts see mineral export receipts topping US$3,4 billion.

The Zimbabwe Revenue Authority (Zimra) recently reported that the mining sector contributed $95,67 million in royalties, against a target of $90 million.

The impressive performance of the revenue head represented 30,86 percent jump from the US$73,11 million achieved in 2017.

Chamber of Mines of Zimbabwe chief executive officer Isaac Kwesu said the jump in mining royalties was indicative of the growth of the mining sector.

This year, Kwesu predicts a jump in mineral output, but only if Government addresses the cost of doing business in the country.

“The challenge remains the high cost structure in the industry but as long as we manage to produce cheaply, as long as we secure inputs cheaply, as long as we get capital cheaply, I think the sector is poised to expand output.

“We know that the authorities are doing something about the challenges we face as a sector and the industry continues to engage,” said Kwesu.

He said the mining sector must take advantage of the rising global prices, “otherwise we miss the opportunity”, if the country does not increase output.

Government wants the mining sector to generate $12 billion revenue by 2025.

Gold blings with 33,2t

Gold deliveries to Fidelity Printers and Refineries, a gold buying arm of the RBZ, reached 33,2 tonnes, a record high for the country.

The annual target was 30 tonnes.

It represents a 33,9 percent increase from the 24,8 tonnes delivered in 2017.

The output was the greatest since 1980. Small-scale producers, who confront a plethora of challenges, continued to dominate the country’s gold deliveries, accounting for 65,3 percent of the total deliveries.

Primary producers, who have all the sophisticated equipment, contributed 34,7 percent to last year’s gold deliveries.

Mangudya said the “marked increase” in gold deliveries was realised against the background of “strong Government and RBZ support and incentives to further boost production and exports”_Business Weekly

Gold near two weeks lows as dollar rebounds

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Gold near two weeks lows as dollar rebounds

Gold prices today held near two-week lows touched in the previous session as the dollar rebounded after cautious comments from U.S. Trade Representative Robert Lighthizer stoked concerns over progress in U.S.-China trade talks.

Spot gold was down 0.1 percent at $1,318.06 per ounce as of 0132 GMT, after touching its lowest since Feb. 15 at 1316.43 in the previous session.

U.S. gold futures were flat at $1,321.40 an ounce.

The dollar held firm above a three-week low against major currencies.

The United States will need to maintain the threat of tariffs on Chinese goods for years even if Washington and Beijing strike a deal to end a costly tariff war, President Donald Trump’s chief trade negotiator, U.S. Trade Representative Robert Lighthizer, told lawmakers on Wednesday.

Asian stocks slipped on Thursday after the cautious comments from Lighthizer.

 The Federal Reserve will stop shrinking its $4 trillion balance sheet later this year, Fed Chairman Jerome Powell said on Wednesday, ending a process that investors say works at cross-purposes with the Fed’s current pause on interest-rate hikes.

U.S. President Donald Trump and North Korean leader Kim Jong Un will hold another day of talks at their second summit in eight months on Thursday, after swapping compliments at a dinner but giving no sign of progress on the key issue of denuclearisation.

UK Prime Minister Theresa May won a two-week reprieve on Wednesday from British lawmakers, who postponed a threatened rebellion aimed at blocking a no-deal Brexit after she agreed to a possible delay to Britain’s departure from the European Union.

* India and Pakistan both said they shot down each other’s fighter jets on Wednesday, with Pakistan capturing an Indian pilot a day after Indian warplanes struck inside Pakistan for the first time since a 1971 war, prompting world powers to urge restraint.

At least 8 tons of gold were removed from the Venezuelan central bank’s vaults last week, an opposition legislator and three government sources told Reuters, in the latest sign of President Nicolas Maduro’s desperation to raise hard currency amid tightening sanctions.

Indonesian authorities on Wednesday ramped up efforts to find 37 people feared buried by the collapse of an illegal gold mine on the island of Sulawesi that killed at least four people._Reuters

skom’s Molefe ‘stonewalled’ Glencore South Africa, ex-CEO Says

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skom’s Molefe ‘stonewalled’ Glencore South Africa, ex-CEO Says

South Africa’s state-owned power utility refused to renegotiate a coal deal with a mine owned by Glencore Plc’s local unit and tried to penalize it for supplying sub-standard fuel, resulting in the operation being placed in bankruptcy protection and being sold, a former head of the business said.

“It was a stonewall negotiation. It wasn’t a discussion, it was a position.”

The Optimum coal mine supplied Eskom Holdings SOC Ltd.’s Hendrina power plant and was placed under a local form of bankruptcy protection known as business rescue while owned by Glencore in August 2015. The operation was losing money because the power producer was paying a fixed price for the fuel, but the cost of mining it was rising more quickly than inflation, said Clinton Ephron, the former chief executive officer of Glencore’s local operation.

The only possible way to have saved the business would be to renegotiate the contract, he said. But when Ephron and Glencore CEO Ivan Glasenberg met then-Eskom CEO Brian Molefe about the contract, he said the electricity producer “was not willing to negotiate,” Ephron told a judicial panel probing corruption particularly during Jacob Zuma’s presidency. “It was a stonewall negotiation. It wasn’t a discussion, it was a position.”

In 2015, Glencore was pressured by former Mineral Resources Minister Mosebenzi Zwane into selling the Optimum coal complex to a company part-owned by members of the Gupta family, who were friends with Zuma, for 2.15 billion rand ($155 million). Allegations of corruption against the Guptas helped bring down his presidency. The Guptas, Zuma and Zwane deny any wrongdoing.

Glencore was “suspicious” of the actions of outside parties who forced it to sell Optimum to the Guptas, Ephron said.

The Guptas have left the country, while Optimum has been placed under administration and is in the process of being sold.

A 2016 report by the Public Protector’s office, which was led by Thuli Madonsela and ordered the set-up of the judicial commission of inquiry, found that Eskom’s conduct relating to Optimum “was solely to the benefit of Tegeta,” which belonged to the Guptas.

“We were shocked by what came out subsequently in the Public Protector’s report,” Ephron said, adding that it then became“quite easy for us to connect the dots.”

Nedbank Ltd., South Africa’s fourth-largest bank, estimates that corruption, maladministration and bad policies shaved 470 billion rand ($33.9 billion) off the nation’s gross domestic product between the start of Zuma’s second term in May 2014 and February last year, when the ruling African National Congress forced him to step down to stem a loss of support-Bloomberg News

SA platinum producers asked court to block strike

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SA platinum producers asked court to block strike
South African platinum producers, the world’s biggest miners of the metal, have asked a court to block a planned strike by one of the country’s largest mining unions that the companies say would further hurt the struggling industry.

Anglo American Platinum Ltd., the world’s top platinum-group metals supplier, and other producers want the Association of Mineworkers and Construction Union to be denied the legal right to start a seven-day strike at platinum mines on Feb. 28. The walkout would follow a strike over wages that’s been underway at Sibanye Gold Ltd.’s gold mines since November, and worsen already fraught labor relations.

 The threat of more strikes also comes as palladium, which is mined with platinum, surges to fresh records.“We are of the view that AMCU is not acting in the best interests of workers, or the industry,” the Anglo American Plc unit said. The outcome of the court interdict to block the strike is expected Wednesday.

Industry-wide action would signal deteriorating relations between producers and the militant union that held the longest-ever strike in the country’s platinum sector in 2014. Producers there operate some of the world’s deepest, costliest and most labor-intensive mines, and are bracing for a fresh round of wage talks with AMCU this year. The threat of more strikes also comes as palladium, which is mined with platinum, surges to fresh records.

Companies have a “strong legal case” to avert the strike, the Minerals Council South Africa said. The lobby group estimates producers could lose 1.3 tons of PGM production, equal to more than 500 million rand ($36 million), for each day that workers don’t show up.

Output losses will depend on the number of workers who down tools, Impala Platinum Holdings Ltd.’s spokesman said. Sibanye has made preparations for the strike and doesn’t expect production to be significantly impacted, spokesman James Wellsted said.

“In the event of a strike proceeding, it would not be the case that work could restart immediately,” the council said. “A strike is always disruptive for longer than the period of the actual strike.”-Bloomberg News

Tonnes of gold lost through illegal market

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Tonnes of gold lost through illegal market

ZIMBABWE is producing close to 100 tonnes of gold, but the bulk of that is being lost to the black market as small-scale miners, who are the main producers in the country, shun official channels, a government official has said.

Mines deputy minister Polite Kambamura told leaders of the Zimbabwe Miners Federation at a meeting in Harare yesterday that a lot of gold was being lost through informal channels.

Last year, deliveries to the sole buyer of gold, Fidelity Printers and Refinery (FPR), amounted to 33,4 tonnes.

“The bad news is that for February, after the Reserve Bank of Zimbabwe (RBZ) announced the monetary policy, we have received only 20kg, which means there is a problem there.
What we want is to mobilise and redirect gold to small-scale miners. We feel with the current challenges, we are losing gold to other markets. I am very convinced that we are already at 100 tonnes, but we are losing more gold to under-declaration and smuggling. We are losing gold to the other market due to some grievances,” Kambamura said.

The miners who attended the event said the central bank did not consult before pegging the United States dollar retention threshold at 55%.

According to the miners, the central bank was responsible for low bullion deliveries as it had failed to come up with robust ways to handle the buying of gold.

“Why does the government not open up to other players to buy gold from miners because FPR is the sole refiner and buyer of gold in the field? We understand that there are some agents who FPR are paying 90% in USD and then us, as small-scale miners, are getting a raw deal. How can a middleman get 90% in USD and yet us major producers of gold, are given a raw deal of 55% in USD and the rest in RTGS dollars”.

“So we strongly feel (that) in order to curb the loopholes, there are some elements in FPR that we feel have over stayed their mandates. The same people are sitting on boards at RBZ, FPR and Aurex. They are responsible for the buying of gold in FPR and allocation of funds, and at the end of the period, they can manipulate the whole system. We strongly feel that these people are working with gold barons, hence they are coming up with such policies that are negatively impacting the small-scale miners. If the composition of these boards does not include the primary producers, I don’t think we are heading anywhere,” said one miner.

Sasha Gomez, a gold buyer who attended the meeting, said the RBZ should pay at least 90% of the gold delivered in USD to cut out foreign buyers who pay in hard currency.

Another miner Tobias Kadenhe weighed in saying the current forex retention threshold by the central bank did not factor in costs incurred during the mining process.

Chris Hukama from Hurungwe Kariba Association said gold deliveries would remain low until authorities recognised the small-scale miners as the primary producers of gold.

“The governor said he has consulted all stakeholders, but the small-scale miners were not consulted. We have become as small-scale miners the primary producers of gold, meaning that we need recognition. A miner submits his requirement and FPR tells you who to sell to. Our economy is in a volatile situation; you can’t plan for three years in advance and yet the gold initiative fund takes years to supply the equipment we have applied for and this will eat into our planning and finances. And hence what the minister has said that up to now they only got 20kg. It is as a result of the negative attitude by RBZ towards the small-scale miners. We can’t run away from that fact. Until and unless you recognise our importance into this industry, you will get the amount of gold that you want. You must treat us fairly,” Hukama said.

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