Fidelity Printers and Refiners (FPR) has reviewed upwards forex to local currency ratios for paying gold producers to 70/30 with 70% of the gold sale proceeds being paid in local producer’s Nostro account and the balance of 30% shall be paid in local currency at the ruling rate in the producer’s ZW$ account.
This comes after small scale miners have ex- pressed concern over the forex component and the late payment for gold delivered to Fidelity Printers and Refiners (FPR), saying the development will cripple production of the yellow metal.
According to the FPR General Manager Fradreck Kunaka, small scale gold buying agents and artisanal producers shall be paid in cash at a flat price of forty five United States dollars (USD45.00) per gram of fine gold.
“Large gold buying agents must have a mining operation producing a minimum of fifty (50) kilogrammes fine gold per month to qualify for a Fidelity Printers and Refiners (FPR) agency permit.
“Small scale gold buying agents will have to enter into an Agency Agreement with FPR which the agents shall operate.
“FPR and the National Gold Monitoring Teams are enhancing surveillance to ensure that all gold is sold through FPR in line with the country’s regulations,” said Kunaka.
In the last episode of GreatDykeTV Covid-19 Business lessons, the Buy Zimbabwe Founder and Minex Chairman Munyaradzi Hwengwere urged FPR to take advantage of the depressed black market so that they get all the gold in the country.
“Right now the black market is depressed, but it is higher the equivalent that Fidelity is giving.
“Isn’t it the time that Fidelity in the interest of getting all the gold, would say because this country is desperately in need of foreign currency, they should pay even less than $50 and l bet they will get all the gold in the country,” he said.
Responding to the development, some of the miners, welcomed the move saying that will help in surpassing the gold delivery target.
“This is a good move taken, now we will build our nation together it’s a fair price at the moment let’s give them the gold and as miners we will surpass the target, it’s a matter of seconds together we will make it,” said Tawanda Manyangadze, a small scale miner from Penhalonga in Mutare.
” We welcome the move by Fidelity, under the mining roadmap, gold is expected to contribute US$4 billion and l hope we will be able to surpass the target due to this positive move,” said Owen Maphisa a miner from Chegutu.
Gold is one of Zimbabwe’s biggest foreign currency earners, having accounted for US$1,3 billion in annual forex receipts in 2019, translating to close to a third of total export earnings.
The small-scale mining sector, which accounts for more than 60% of gold deliveries to FPR, last year produced 17 tonnes of gold while major gold mines produced 10 tonnes.
In total, the country’s gold output fell 17% in 2019 to 27,66 tonnes, down from 2018’s 33,29 tonnes, according to the central bank, contributing about 37% to mineral exports, down from 43% recorded in the previous year.
The decline was attributed to electricity shortages, gold leakages and inadequate equipment for small-scale miners.
In April this year, small-scale miners ex- tracted 0,728 tonnes of gold while primary
producers delivered 0,735 tonnes, resulting in a 31% decline in total to 1,46 tonnes from 2,12 tonnes produced in April 2019.
In February, gold deliveries fell 34% to 1,403 tonnes from 2,136 tonnes during the same period in 2019. Again, in March gold deliveries dipped 32% to 1,77 tonnes.
Cumulatively, gold deliveries have plunged 17% to 7,18 tonnes in the first four months of 2020 from 8,63 tonnes extracted during the same period in 2019.
The decline was attributed to bottlenecks in imports caused by Covid-19, as governments moved to combat the spread of the virus.
Before the review 55 percent was paid in forex while 45 percent was local currency.