Dumisani Nsingo, Senior Reporter
ZIMBABWE is headed for golden moments in the marketing of its gold as the country has completed most of the requirements needed for it to be readmitted into the London Bullion Market Association (LBMA), the world’s prime metals market.
The country was ejected from the LBMA in 2008 after gold output plunged to three tonnes per year and since then Zimbabwe has been marketing its gold through a third party — South Africa’s Rand Refinery which is charging a commission of 0,3 percent.
Fidelity Printers and Refiners (FPR) operations manager Mr David Mpofu told a gold mining conference in Gwanda last week that the country has met most of the conditions stipulated by LBMA and was now waiting for the green light to be re-admitted into the market.
“We are working towards being accredited by the LBMA because in 2008 we lost the accreditation and there are numerous conditions. We have met most of the guidelines, one of the critical issues was to meet 10 tonnes per year and we have surpassed that but there are quite a number of them, which we have to satisfy but we are meeting quite a number of them.
“The gold industry is so controlled one has to ensure that if the gold is going out to the international market it has to be accredited gold from an accredited refinery, so that they are able to trace it right up to the source. There are set guidelines, it’s the same with ISO certification thus there has to be a certain criteria, which you have to meet on that gold. If you are accredited your gold is accepted everywhere because you are an accredited refinery,” said Mr Mpofu.
In 2014, FPR made an initial application advising LBMA that the country was committed to refining 10 tonnes per year.
Gold production in the country has been on a growth trajectory since authorities decriminalised artisanal mining in 2014, achieving 15 tonnes that year. Zimbabwe’s annual gold output increased to 24,8 tonnes in 2017 from 21,1 tonnes the previous year driven by a rise in deliveries from small-scale miners. Re-admission to the LBMA would mean that the country will have access to global gold buyers.
“The challenge we have at the moment is that we are restricted in terms of marketing our gold because it has to go through the Rand Refinery, which is accredited. Although we can choose another accredited refinery, South African is the one, which is much closer to us. So it’s the most convenient.
Yet when you are accredited with LMBA we can sell our gold to whoever and whenever, so it gives us that liberty. Even in terms of negotiations you’re not tied to one trading partner as a country and that’s what used to happen,” said Mr Mpofu.
FPR, the country’s sole buyer of gold and a unit of the Reserve Bank of Zimbabwe, was re-opened in 2013 following years of redundancy resulting from under-capitalisation and the liberalisation of gold exports in 2009.
Meanwhile, the Reserve Bank of Zimbabwe is considering revising upwards the $150 million Gold Development Initiative Fund (GDIF) following an overwhelming uptake by small-scale miners, officials said.
Fidelity Printers and Refiners head of GIDF Mr Matthew Chidavaenzi said the Central Bank was overwhelmingly satisfied with the uptake of the gold support scheme by small-scale miners. He said GDIF division was seized with processing huge numbers of loan applications by small-scale miners from various parts of the country.
“We currently have a huge backlog with regards to clearing loan application but we have set ourselves a target that 15 September we should be done with anyone who applied for the loan,” said Mr Chidavaenzi.