Uncompetitive market derails gold mobilisation programme
Zimbabwe’s uncompetitive formal market could derail the government’s ambitious gold mobilisation programme as compliance will be low, the Chamber of Mines of Zimbabwe has said.
This week the government launched the gold mobilisation programme as part of efforts to encourage local miners to comply voluntarily.
But, the Chamber of Mines of Zimbabwe CEO, Isaac Kwesu, said the formal market must be competitive.
“Voluntary compliance is an issue of market forces that ensures that miners are paid timeously at a fair price. And naturally you have no incentive to participate in illegal markets when the formal market is competitive,” Kwesu said.
He said output will be increased by mobilising gold that is already being produced but not sold through formal markets.
“Remember, we account for gold deliveries through Fidelity but some of the output that are being produced is not being delivered to fidelity. So if all output found its way to the formal market that would be a quick win,” Kwesu said.
The development comes at a time miners are selling their gold in the lucrative black market, where payments are done timeously.
Recently, Mines and Mining Development minister, Winston Chitando, said the government was optimistic gold output will exceed 100 tonnes in 2023 following the mobilisation programme.
Fidelity Printers and Refineries’ acting general manager Peter Magaramombe was also confident that the numbers can be achieved.
“We are going to make sure that we are giving the right price to miners. As you can see right now in terms of our prices of the small-scale miners we are paying some very good prices.
“Secondly, we are making sure that we have got cash readily available. If you don’t have cash, the miners will go to the next person which is black market.
So, basically, those are two main key issues that we need to deal with,” Magaramombe said.
The gold mobilisation programme, which began on Monday this week, seeks to enforce compliance by gold dealers, increase accountability by stakeholders with the main goal of boosting gold deposits to Fidelity, the country’s sole gold buyer and marketer of gold.
Government is targeting to have a mining industry worth US$12bn by 2023.
Chitando said there is potential to far exceed the target.