Zimbabwe earns US$381m from gold exports

ZIMBABWE earned US$381 million in the first half of the year from gold exports after large and small-scale miners delivered 9,6 tonnes of the precious metal to Fidelity Printers and Refiners (FPR), which puts the industry on a solid path to achieve this year's targeted output of 24 tonnes.

Last year, the country generated $684 million from the export of 18,4 tonnes of gold.

Inclusive of the gold directly exported by the country's three pgm (platinum group metals) producers – Mimosa, Unki and Zimplats – who take their ore to South Africa for processing, gold raked in $412 million in the review period.

Also, if production from pgm producers is factored in, gold production tops 10,4 tonnes, which is 17 percent higher than the same period a year ago.

Overall, total mining revenues in the period rose to US$981,4 million, representing a 0,8 percent rise from a year earlier despite a relatively depressed international commodities market.

Prices have however been recovering.

Gold was traded at US$1 3 48 per ounce on Wednesday.

FPR general manager Mr Fradreck Kunaka told The Sunday Mail Business last week that they paid out $369 million to gold producers during the first half of the year for 9,6 tonnes of gold delivered.

"All the gold bought (9,6 tonnes) was exported, raking in $381 million," said Mr Kunaka.

Large-scale producers contributed 59 percent, while small-scale miners weighed in with 41 percent.

Mr Kunaka believes the performance by small-scale producers, which has improved by 25 percent on the 3,1 tonnes that had been delivered during the same period a year ago, shows a lot of potential that is "still to be fully tapped".

Government has since organised a $100 million facility from China Development Bank for small-scale producers of the yellow metal.

The mining equipment will be delivered in phases, with the first tranche worth $5 million expected in the country at the end of August.

The facility is meant for miners that have a proven track record with FPR, which is the sole buyer of gold.

Reserve Bank of Zimbabwe (RBZ) has been allocating cash to FPR to help minimise the impact of cash shortages on deliveries.

"The timely intervention also contributed to the 25 percent growth in gold deliveries for 2016," said Mr Kunaka.

Government targets to produce 24 tonnes of gold this year. The Ministry of Mines and Mining Development together with the RBZ and law enforcement agencies have been working to eliminate leakages from the formal market.

Small-scale producers, particularly those who receive payments from FPR through bank transfers, are now entitled to a 5 percent incentive.

There is also an aggressive drive to formalise the operations of miners.

It is envisaged that the formalisation process would make it easy for the miners to trade formally going forward and ensure the refinery is compliant with the provisions of the Responsible Gold Scheme. The Responsible Gold Scheme seeks to prevent money laundering and financing of terrorism activities which have become rampant in the world, especially in Europe.

Mr Kunaka said, "Miners are encouraged to participate in nation building by complying with the gold marketing arrangements put in place by Government.

"Selling the gold to black market buyers who smuggle it out of the country will only mean that we continue to register high unemployment levels."