News / National
Small-scale gold producers shun rand
18 Jul 2016 at 01:34hrs | Views
Small-scale gold producers are refusing to be paid in South African rands for gold delivered to Fidelity Printers and Refinery because of differences with the sole gold buyer over the conversion rate used against what is being offered on the black market.
This comes at a time, Government and the Reserve Bank of Zimbabwe are on an exercise to stamp out gold smuggling in the country. The central bank estimates that 40 percent of gold produced in the country is smuggled out. The producers said their differences with FPR have come about because the Reserve Bank of Zimbabwe unit is using a rand rate which is lower than the rate prevailing in the market.
They said as a result accepting the Fidelity Printers rand rate will result in a loss of between $3 and $5.
Currently gold is trading at $41 dollars per gram and at R592,59 at Fidelity Printers.
The rand is currently trading at 14,33 to $1.
Zimbabwe Miners Federation national technical advisor Marufu Sithole confirmed the development.
Mr Sithole, who is a gold buying agent and operates Chimona Mining company in Shurugwi said: "Small-scale gold producers are now facing challenges especially when buying mining accessories and consumables such as explosives, fuel, food and other services. The rate of the rand prevailing in the market is different from that being offered by Fidelity Printers.
"Some buyers in the market are using an exchange rate of $1 to R15 while on the other hand the rand is still being rejected by most businesses. They want the US dollar and this is forcing buyers to go to the black market to source for US dollars," said Mr Sithole.
"If you compute you will find out that gold will have been traded at $38 per gram, which is $3 less than the market rates. My advice to Government is that they must regulate the trading of currencies in all businesses because the non-regulated miners are refusing to trade their gold as we speak," he said.
A gold buying agent in Filabusi in Matebeleland South Christine Chikombe said buyers in her area are faced with the same problem.
"They are refusing rand and I am running short of US dollars because Fidelity Printers here only have rand," she said.
A Fidelity Printers official who preferred not to be named said: "Still no cash, our guys at head office are making frantic efforts to get cash but the situation is getting dire. Rands are available and bank transfers can also be done," said the official.
Small-scale miners who have been given a priority in terms of getting instant cash are also shunning the new measures put in place by RBZ, particularly Real Time Gross Settlements due to the low withdrawal limits set by banks.
This comes at a time, Government and the Reserve Bank of Zimbabwe are on an exercise to stamp out gold smuggling in the country. The central bank estimates that 40 percent of gold produced in the country is smuggled out. The producers said their differences with FPR have come about because the Reserve Bank of Zimbabwe unit is using a rand rate which is lower than the rate prevailing in the market.
They said as a result accepting the Fidelity Printers rand rate will result in a loss of between $3 and $5.
Currently gold is trading at $41 dollars per gram and at R592,59 at Fidelity Printers.
The rand is currently trading at 14,33 to $1.
Zimbabwe Miners Federation national technical advisor Marufu Sithole confirmed the development.
Mr Sithole, who is a gold buying agent and operates Chimona Mining company in Shurugwi said: "Small-scale gold producers are now facing challenges especially when buying mining accessories and consumables such as explosives, fuel, food and other services. The rate of the rand prevailing in the market is different from that being offered by Fidelity Printers.
"Some buyers in the market are using an exchange rate of $1 to R15 while on the other hand the rand is still being rejected by most businesses. They want the US dollar and this is forcing buyers to go to the black market to source for US dollars," said Mr Sithole.
"If you compute you will find out that gold will have been traded at $38 per gram, which is $3 less than the market rates. My advice to Government is that they must regulate the trading of currencies in all businesses because the non-regulated miners are refusing to trade their gold as we speak," he said.
A gold buying agent in Filabusi in Matebeleland South Christine Chikombe said buyers in her area are faced with the same problem.
"They are refusing rand and I am running short of US dollars because Fidelity Printers here only have rand," she said.
A Fidelity Printers official who preferred not to be named said: "Still no cash, our guys at head office are making frantic efforts to get cash but the situation is getting dire. Rands are available and bank transfers can also be done," said the official.
Small-scale miners who have been given a priority in terms of getting instant cash are also shunning the new measures put in place by RBZ, particularly Real Time Gross Settlements due to the low withdrawal limits set by banks.
Source - the herald
