Fidelity cuts off the middleman

FIDELITY Printers and Refiners (FPR) has upped the ante in gold mobilisation, amid indications that it will soon be buying the precious metal directly from gold miners as it desperately seeks to arrest leakages and boost deliveries.

Fidelity is the country's sole gold buying unit superintended by the Reserve Bank of Zimbabwe. Yesterday, Fidelity general manager Fradreck Kunaka, said the gold mobilisation strategy will enhance accountability and stem illegal gold trade.

"Fidelity Printers and Refiners (Private) Limited would like to advise the public that it has enhanced arrangements for purchasing of gold from artisanal and small-scale gold miners through collaboration with and working directly with gold producers," said Mr Kunaka.

"The collaboration and direct engagement between Fidelity and gold producers will assist in curbing illegal gold trade and leakages. It will also foster transparency and accountability in the production and selling of gold.

"Under the new and more robust system, Fidelity will utilise its gold buying and service centres across the country to buy gold directly from the artisanal and small scale miners and the use of agency arrangements where necessary."

In the 2019 Budget, Finance and Economic Development Minister Professor Mthuli Ncube, announced a raft of measures "for improved performance of the mining sector". The measures include reviewing surrender requirements to ensure continued production across all key minerals; dealing with mining claims held for speculative purposes; resuscitating closed and opening of new mines with potential; action and roll out plan for 22 assets under ZMDC; and "plugging leakages in the marketing of gold, including the implementation of a robust monitoring framework".

Gold deliveries to Fidelity have been astonishing since the start of the year, hitting 28 tonnes by the end of September and in so doing, breaching the record 27,1 tonnes set in 1999 at the height of gold production.

As at end of October, gold deliveries had surpassed the 30 tonnes mark, which was this year's target. Government has since set a stretch target of 34 tonnes, which could be achieved. However, challenges that include fuel shortages in the country are threatening to rock the boat as miners are now struggling to ferry their ore to milling centres.

Small-scale miners are also concerned over the 70 percent (USD)/ 30 percent (RTGS) payments for delivered gold. Most of the miners want Fidelity to pay all the money for gold in US dollars, as is done by illegal gold buyers.

During gold mobilisation outreach meetings across the gold producing areas in the country, Fidelity teams were told by some small-scale miners that they sell gold to some illegal gold buyers because they paid hard cash in full.

Other illegal buyers are understood to be bankrolling some small-scale miners to enable them to ramp up production through provision of fuel to power their crushers and torches for use underground.

This has caused some illegal miners to shun the formal market in favour of the risky parallel market. It is now expected that the new measures by Fidelity would go some way in containing gold leakages.