- July 25, 2020
- Posted in LOCAL
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