Fidelity anticipate increase in gold deliveries

20 Jan, 2021 - 10:01 0 Views
Fidelity anticipate increase in gold deliveries Mr Fradreck Kunaka

The Sunday News

 Judith Phiri, Sunday News Reporter

FIDELITY Printers and Refiners (FPR) has said they anticipate an increase in gold deliveries in 2021, from the decline in 2020 which saw the deliveries dropping by 31 percent to 19,052 tonnes due to a host of reasons including smuggling and subdued performance by producers in the sector.

FPR, a subsidiary of the Reserve Bank of Zimbabwe, is the country’s sole gold buyer and official figures showed that deliveries declined to 19,052 tonnes in 2020 from 27,66 tonnes a year earlier.

In an interview, FPR general manager Mr Fradreck Kunaka said the company was anticipating a slight increase in gold deliveries this year to topple the 19,052 tonnes delivered in 2020.

“We should anticipate to see an improvement in 2021 in gold deliveries to the company and l do not think we will go below what we recorded in 2020. In 2021 we should see a surge in terms of deliveries coming through the formal channels as there was a decline of what was flowing into the formal sectors last year due to a host of various reasons,” said Mr Kunaka.

He said ordinarily the decline in deliveries in 2020 was not necessarily a reflection of the decline in production, but it was just a decline of what was flowing into the formal sectors.

Mr Kunaka added: “There are quite a number of factors we look at when considering the decline in gold deliveries. You would find that generally businesses tend to slow down and take a back step especially when new policy changes do come in.

With the current change reforms that were enacted, I think Government will also try take a bit of time trying to understand exactly how they are going to apply some of these policy changes and also ensure that they mitigate against some of the potential negative impact on the businesses so that tends to slow down progression.”

He also highlighted that the Covid-19 pandemic also contributed as a factor to low gold deliveries. Mr Kunaka said the Covid-19 pandemic began in the first quarter of 2020 which resulted in most international flights being affected.

He noted that that the sector that usually contribute much of the inflows, the artisanal and small-scale miners’ sector which requires to be paid in cash was affected when the coming in cash also became a challenge when there were no flights coming in so. With delays in payment for deliveries, this resulted in smuggling of the mineral to countries such as South Africa and the United Arab Emirates.

“So, you would find that cash was then flowing into the country, mostly through immodest channels and ordinarily that also then saw some of the players then flooding on the parallel market. So, this resulted also in the decline in deliveries last year,” added Mr Kunaka.

He highlighted that currently a number of international flights were coming in, cash required by the sector was also coming so that they do not delay payment for deliveries being done so far.

With some experts in the mining industry stating that the Covid-19 pandemic could derail the Government’s plan to expand the value of its mining industry to $12bn by 2023, Mr Kunaka said it was still too early to conclude in that manner.

“The Covid-19 pandemic has had a negative impact to the mining sector, but l think it is still early days yet to say it might significantly impact the attainment of the $12bn target by 2023. Mining has been declared an essential service and as such mining still continues.

Hence, it also depends on how the various mines manage the pandemic at their various sites so as to ensure that the pandemic does not disrupt their operations. And if their operations are not disrupted l see the $12bn target by 2023 being attainable and coupled with some of the various methods that are being taken by Government to ensure that the sector is able to raise funding and enhance their operations,” said Mr Kunaka.

Zimbabwe Miners Federation (ZMF) spokesperson Mr Dosman Mangisi said the Covid-19 pandemic did affect the mining industry last year.

“Miners were greatly affected by the Covid-19 pandemic where we saw Fidelity Printers and Refiners running out of cash because all nations had lockdowns, flights were also not traveling and investors in the area of chrome could not come into the country so that alone negatively impacted the industry,” said Mr Mangisi.

He added most miners were also forced to downsize their man power in fear of spreading the Covid-19 pandemic and their production capacities decline.

He noted that the other challenge that would derail the attainment of the $12bn target by 2023 of the mining industry was that the country does not process most of the minerals and they were exported as raw material.

Mr Mangisi said it was key for value additional and benefaction to be part of the mining industry.

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