The Sunday News
GOLD deliveries from small-scale miners to the Reserve Bank of Zimbabwe’s subsidiary, Fidelity Printers and Refinery, went up by 100 percent in the first quarter of the year, a positive sign as the country seeks to re-apply for accreditation into the prestigious London Bullion Marketers Association.
RBZ divisional director — exchange control, Mr Moris Mpofu said gold deliveries surged to around 600 kilogrammes in April from 300 kilogrammes at the beginning of the year.
He attributed the increase in deliveries to a number of initiatives and support systems put in place by the RBZ for Fidelity Printers and Refinery to effectively mobilise the gold extracted in various areas in the country.
Government cancelled individual gold buyers’ licences last year after an upsurge in leakages mainly due to smuggling of the mineral outside the country.
As a way of ensuring transparency and accountability in the gold sector Government put in place a Gold Mobilisation Committee that reports to the Ministry of Mines and Mining Development and is chaired by the RBZ.
“This committee does regular monitoring on the field to ensure that all the gold that is done through custom milling plants and the like is sold to Fidelity. It takes stock of what has been done and delivered to Fidelity.
“Now everyone on the ground who has been registered by the Ministry of Mines to do custom milling knows that whatever they produce has to go to Fidelity,” Mr Mpofu said.
He said Fidelity Printers and Refinery now has mobile units which were capacitated by RBZ to buy gold in all catchment areas and Fidelity was now buying all gold offered by miners without the previous minimum quantity restriction of five grammes.
“Starting in January we were talking about 300 kilogrammes of gold per month from the small-scale sector but we realised that from April it’s now over 600 kg per month. We think it’s a huge increase and it’s a result of increased follow-ups, mobilisation, accounting and also available purchasing centres from Fidelity,” Mr Mpofu said.
Fidelity has opened a number of buying centres in addition to the ones available in Harare, Bulawayo, Kadoma, Kwekwe, Gweru, Gwanda, Filabusi, Zvishavane, Masvingo and Mutare.
Zimbabwe Miners Federation chief executive officer Mr Wellington Takavarasha said the rise in gold deliveries to Fidelity was due to the control measures that were put in place by Government to ensure that the mineral was traded on the formal market.
“The fact that the Ministry of Mines and Mining Development put in place gold enforcement units led to gold being directed to the right channel. There were many cases of miners declaring nil returns at the Ministry of Mines offices. This was put to an end as such individuals had their mines repossessed for being unproductive.
“More importantly there is now an audit system which shows what a miner is doing in terms of declaring. It’s more of a check list. The increase in deliveries is a plus as the country seeks to be re-admitted into the London Bullion Marketers Association as it improves our chances of attaining 10 tonnes by the end of the year, which is the threshold,” Mr Takavarasha said.
The central bank has put in place a number of measures meant to increase deliveries to Fidelity Printers.
According to the new Gold Compliance Framework Rules, each gold miner is now required to keep a record of ore received for milling.
Millers are also encouraged to pre-estimate the ore quality and this has to be done through laboratory assays.
They are also supposed to keep a record on time spent milling a given quantity of ore and this must also be commensurate with the electricity consumption for the exercise.
If the miller uses generators, a record of fuel usage and its total cost must be maintained.
The framework compels millers to maintain a workers’ register which shall form the basis of computing wages based on the attendance register.
The new framework also mandates millers to keep records and cost of processing and milling chemicals and all gold recovered must be recorded in the log book and sold to Fidelity.
Before 2006, gold produced by both small-scale and large-scale miners exceeded 15 tonnes.
During this time, Fidelity Printers and Refinery was the sole buyer and refiner of gold and an accredited member of the LBMA.
This was largely so, as the gold output realised by the country exceeded the 10-tonne annual threshold required to maintain membership with the London Bullion Metal Exchange.
Under this arrangement, gold produced and refined in the country was directly exported at the international gold prices obtaining at the LBMA, without any middlemen or intermediary.
This, notwithstanding gold output, declined to levels below 10 tonnes in 2007, on the back of the general contraction in economic activity.
As such, Zimbabwe could not maintain its position as a member of the LBMA, therefore the country has been exporting gold through South Africa for refining resulting in loss of revenue.
