Reserve Bank of Zimbabwe increases gold delivery payments

THE Reserve Bank of Zimbabwe through its arm, Fidelity Printers and Refiners (FPR) has increased its payments for gold deliveries in United States dollars from 60 to 70 percent as part of efforts to cushion miners and also improve production.

Speaking on the sidelines of a mining stakeholders meeting in Bulawayo on Friday last week, Zimbabwe Miners Federation (ZMF) first vice-president Mr Ishmael Kaguru said the increase in US dollar payment would go a long way towards capacitating small-scale miners who were feeling the brunt of the three-tier pricing system imposed by unscrupulous mining consumables suppliers.

A three-tier pricing system is prevailing in the market with goods attracting different prices for plastic money, bond notes and the United States dollar.

Under the three-tier system goods attract higher prices if payment is done using plastic money and bond notes.

"During this past week (two weeks ago), the allocation of payment for gold deliveries has been changed from 60 percent and 40 percent to 70 percent and 30 percent. This is a welcome development which shows that the Government is making strides in supporting the mining sector," said Mr Kaguru.

Last month FPR advised small-scale miners that it would no longer be able to pay for 40 percent of gold deliveries in cash as it has no bond notes.

Instead, FPR would pay the miners the 40 percent component through bank transfers with the remaining 60 percent being paid in US dollars.

A notice from FPR customer relations officer, Bhekilizwe Manyathela read:

"Please note that due to the non-availability of bond notes, we have been instructed to stop bond note accruals and, instead, do bank transfers for the 40 percent component.

For those whom we already owe, we kindly urge you to also adopt the bank transfer system until such a time as when we are able to provide bond notes."

Speaking at the stakeholders' meeting Mr Taurai Buyanga, an official at Filberg Enterprises said FPR should consider paying miners 100 percent in US dollars so as to curb the three-tier pricing system as most of the equipment and consumables were exported.

"Most of our equipment is imported and this means that we need miners to buy from us using foreign currency given that bond notes are worthless abroad. Currently we have a situation whereby miners come to us with only bond notes, this is because they exchange some of the foreign currency given to them for bond notes on the black market. Paying the miners using foreign currency will will result in them coming to buy from us using foreign currency as well," Mr Buyanga said.

Mr Kaguru concurred with Mr Buyanga's sentiments, saying 90 percent of mining consumables were imported from South Africa further suggesting that the 30 percent should rather be paid in rand.

"We know that the Government is having challenges with regards to the availability of foreign currency but we are simply saying if we can get the 30 percent in rand, production will be increased.

"Most of our goods are sourced from South Africa and we are importing almost 90 percent of our products and equipment from there. Getting the 30 percent in rand will make it easier for us to pay for our imports," he said.

Mr Kaguru also highlighted that payment of 30 percent through banks transfers was an inconvenience to small-scale miners.

"Since last year December, the 40 percent bonds which is now 30 percent payment, is being paid through bank transfers and no longer being given as cash…bank transfers make it difficult for miners to pay their employees as they have to either try to withdraw the money or transact it to their accounts, which most of them don't have," he said.