RBZ moves to clear outstanding gold payments
The Reserve Bank of Zimbabwe (RBZ) has started clearing all outstanding payments due to small scale miners for the gold delivered to Fidelity Printers and Refiners (FPR) as it moves to ensure deliveries to official channels and plug leakages.
The clearing of outstanding payments comes after Fidelity Printers had failed to pay small scale gold miners in the last two weeks, as limited flights into Zimbabwe, due to Covid-19, had affected the smooth importation of hard currency cash required to pay the miners.
It also comes after gold deliveries slipped 53% to 1.27 tonnes in August from 2.746 tonnes during the same month last year on delays in payment amid fears the yellow metal could have been diverted to an alternative market where payment is instant.
In a recent update to miners, Zimbabwe Miners Federation president Henrietta Rushwaya said RBZ heard the miners’ concerns and committed to the clearance of all outstanding payments.
“We are pleased to announce that FPR gold buying centres began paying out all outstanding areas for gold bullion delivered to them by September 1, 2020.
This set up of prompt payment by FPR after receiving bullion shall be the order of the day going forward,” read part of the update.
From a total of 1.2 tonnes delivered in August, small scale miners contributed 0.418 tonnes while primary producers delivered 0.85 tonnes.
Experts said the 78% drop in gold deliveries by small scale miners to 0.418 tonnes in August 2020 from 1.933 tonnes during the same month last year indicates that the secondary producers are protesting the delays in payments for their precious metal.
Gold is Zimbabwe’s single largest foreign currency earner contributing 38% of the country’s total earnings and more than 60% to the mining sector.
Last year, gold output was 16% down to 27.6 tonnes from 33.2 tonnes in 2018 attributed to suspected smuggling caused by unfavourable mining policies, fuel shortages and lack of technology.
The target for the year was 40 tonnes. Over 30 tonnes of the yellow metal was smuggled to South Africa last year as small scale miners sought to get more and evade the forex retention which was at 55%.
It has now been standardised at 70% for all exports. Zimbabwe is targeting 100 tonnes of gold per year by 2023, a figure which is expected to help the sector to earn US$12bn yearly and only if forex retention threshold, fundamentals and funding issues are addressed.
Gold is expected to lead the charge by contributing US$4bn export earnings by 2023. BUSINESS TIMES