Zimbabwe’s gold export receipts plummeted 46% to record US$53.1m in January 2021 from US$98.1m during the same month last year due to delays in payments and heavy rains, the Reserve Bank (RBZ) has said.
With heavy rains, delays in payments, gold export receipts are likely to plunge further this year, according to industry players.
“Gold export receipts in January 2021 were at US$53.1m from US$98.1m during the same month last year due to subdued deliveries due to Covid-19 effects and heavy rains that we have experienced in January,” RBZ governor John Mangudya said in emailed responses.
Gold deliveries for the month of January 2021 were 0.99 tonnes from 2.54tonnes during the comparable period last year.
Large scale producers delivered 0.64 tonnes while small scale miners delivered 0.35 tonnes to FPR.
The unfavourable gold mining policies have caused gold production to fall in the last two years as miners prefer side marketing where buyers are almost at the same level with the international prices for gold.
Wednesday world gold spot prices were said to be around US$55,482 per kilogramme against the FPR’s US$52,000 per kilogramme, this is likely going to affect the selling of gold to the formal market.
Gold Miners Association of Zimbabwe Irvine Chinyenze said: “The failure by the sole buyer to match the world prices only imply that the gold miner will sell his or her bullion to an alternative market where prices are high.”
Gold’s export receipts fell 16% to record US$891.5m in 2020 from US$1.064.5bn in 2019 due to Covid-19 implications, side marketing, smuggling and delays in payments.
In his 2021 Monetary Policy Statement, Mangudya said side marketing was one of the reasons for the decline in gold deliveries last year.
The Covid-19 pandemic restricted the purchasing of raw materials in China and Russia and the bringing in of physical United States dollars to pay miners.
Resultantly, gold was knocked off its top spot by platinum last year as the highest forex earner. The yellow metal is now the third largest foreign currency earner after platinum and diaspora remittances.
Mining experts say President Emmerson Mnangagwa’s government should give artisanal mining cooperatives legal standing, pay gold producers at world prices and strengthen mining dispute resolution.
In a recent report on Zimbabwe’s gold subsector, the report blamed FPR’s flawed centralised gold buying scheme and called for the law to bring complicit powerful politicians to book as they are believed to be sponsors of machete gangs’ violence in Midlands and Mazowe.
The report said the development of the gold sector is crucial if Mnangagwa’s government is to salvage prospects for Zimbabwe’s economic recovery from decades of economic stagnation.
Zimbabwe is targeting 100 tonnes of gold per year by 2023. Analysts say the figure is unlikely to be reached with the number of challenges in the gold sector.