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Zim bullish on gold prospects …as monthly output averages three tonnes

Zim bullish on gold prospects …as monthly output averages three tonnes

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Zimbabwe is bullish on reaching over 28 tonnes of the gold output this year following a good run averaging three tonnes per month since June.

In June 2021, the half-year gold output was 9.948 tonnes. Output has surged to over 12 tonnes within four months to 22.024 tonnes due to a 5% incentive on deliveries and timeous payments.

Fidelity Printers and Refiners acting general manager Peter Magaramombe told Business Times that the incentive has led to an increase in deliveries.

“As of October 31 2021 gold output surged 37% to 22.024 tonnes from 16.018 tonnes during the same period last year due to friendly policies put in place by the Reserve Bank of Zimbabwe. With an average rate of three tonnes of gold per month, we are expecting to breach 28 tonnes by the end of December,” Magaramombe said.

From the 22.024 tonnes delivered to FPR, small scale miners accounted for 12.95 tonnes against the 9.07 tonnes by primary producers.

According to the official statistics obtained from the Reserve Bank of Zimbabwe, the 28 tonne output will be the third-best output in the history of Zimbabwe.

To date, the 35 tonnes achieved in 2018 is the highest output followed by 29.4 tonnes in 2019.

Experts say Zimbabwe’s output would have surpassed 36 tonnes, had the mining policies been relaxed earlier.

Gold deliveries went up 123% to 3.051 tonnes  in October 2021 against 1.36 tonnes recorded during the same period last year.

The October output will be the third time Zimbabwe has surpassed the three tonne mark.

Experts said the country will surpass last year’s gold export receipts due to an increase in gold deliveries and firming international gold prices.

In June this year, RBZ scrapped taxes on small scale miners, began timeous payments and paid the prevailing international gold prices.

Those who deliver over 20 kilogrammes per month are given an extra 5% incentive and this has pushed volumes.

Though gold smugglers are still there, their role has been greatly reduced.

Smugglers were believed to be swooshing close to 2.5 tonnes every month but with new policies in place, the majority of them are moving out of the country in search of greener pastures.

Small scale miners said FPR is now the buyer of choice who offers the best prices in the world.

Zimbabwe Miners Federation chief executive Wellington Takavarasha said now that FPR is better than all buyers, members are delivering their yellow metal formally.

“As small scale miners we are averaging 500kg per week which gives us two tonnes per month due to new incentives and spot payments by the RBZ,” Takavarasha said.

On Tuesday international gold prices stood at US $58 660 per kilogramme and Fidelity was paying above US$60 000 per kg to woo miners to deliver to FPR.

The government has moved to provide equipment in gold centres to move towards helping the attainment of US$4bn gold export revenue.

The government wants to establish new gold centres following a sudden increase in output.

The gold centres are expected to provide basic equipment such as compressors and jackhammers as well as working capital to facilitate optimal production by small-scale miners who supply gold ore.

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RBZ shall maintain presence, directly or through approved buying agencies at all gold centres so as to buy all the gold produced.

The gold centres will also provide technical services to miners who supply the ore.

In August, the Cabinet approved proposals for the establishment of over 20 gold centres by mid-2022.

Accordingly, memoranda of understanding will be signed with four investors who have been identified for the purpose of setting up the gold centres.

The investors will own 100 % equity in the centres, while those who operate joint ventures with the ministry of Mines and Mining Development will fully fund the operations of the centres in return for a 90% equity stake.

Some of the gold centres are expected to be established in Makaha, Odzi, Mount Darwin, Shamva, Mazowe and Silobela.

 

 

Business Times

 

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