Gold deliveries fall as rains weigh in

GOLD deliveries marginally declined in February to 2,01 tonnes compared to 2,6 tonnes delivered in January, mainly because of rains that hit most parts of the country.

Zimbabwe has been experiencing rains - which were heavy in other parts country - since the beginning of February, resulting in artisanal gold miners struggling to operate daily due to flooding of their mines.

Last month, small-scale miners delivered 1, 08 tonnes of gold, which was a significant jump from the 0,69 tonnes delivered in the same period last year.

Primary gold producers delivered 0,93 tonnes in February this year, representing a 0,16 tonnes jump from same period in 2017.

In January, large-scale miners delivered 1,2 tonnes of gold to Fidelity Printers and Refiners (FPR), the gold buying unit of the Reserve Bank of Zimbabwe.

FPR general manager Fradreck Kunaka told The Herald Business last week that approximately $110 million was used in paying miners for gold delivered.

"Total deliveries in February 2018 were 2, 01 tonnes. Small scale producers delivered 1, 083 tonnes (while) primary producers delivered 0,93 tonnes," said Mr Kunaka.

The decline in gold deliveries last month was across the board, given that small-scale miners had delivered 1,4 tonnes while primary producers delivered 1,2 tonnes in January.

Artisanal miners have become central in gold mining in the country after delivering 53 percent of the 24,8 tonnes achieved last year.

Early indications are that artisanal miners will again deliver more gold than primary producers this year, particularly if they access funds to boost their operations.

Mr Kunaka expects deliveries to rise in the near future, driven by mechanisation especially by small-scale miners who are currently getting loans under the Gold Development Initiative Fund.

"We are still in the process of disbursing the Gold Development Initiative Fund to small-scale miners. The loan facility is primarily for the acquisition of gold mining and processing equipment as well as access to provision of a float cash for selected Fidelity Printers and Refiners' gold buying agents.

"The aim is to assist in boosting gold production. We envisage an increase in gold production from the small-scale miners as a result of the loan support they are receiving," said Mr Kunaka. The loan facility is being provided by the RBZ and disbursed through FPR.

RBZ Governor Dr John Mangudya has increased the facility to US$150 million this year from US$74 million disbursed last year, after realising the importance of gold in generating the much-needed foreign currency.

The Zimbabwe Miners Federation - a representative of over 8000 small-scale miners - says the miners are ready to increase deliveries once they get funding.

However, ZMF has called for the inclusion of all stakeholders in the disbursement of funds under the Gold Development Initiative Facility to ensure those who badly require the money, access it and ramp up production.

Previously, there were concerns that some artisanal miners did not benefit because they lacked collateral while in some cases others were illiterate, and were unaware of the existence of the fund.

ZMF believes if small-scale miners get packages of up to $20 000 to acquire critical machinery such as compressors, they would increase production. Government has set a target of 30 tonnes of gold this year, after recording successive delivery increases in the last five years.