Small-scale deliveries fall 80 percent

HARARE – Gold deliveries closed their lowest quarter yet in September after deliveries slumped 17.4% but an improvement in large scale deliveries saw a 7.24% rise in the monthly figure to 1 362.14kg from 1 270.21kg in August.

Data from Fidelity Printers & Refinery shws that third quarter deliveries were 4 038.73kg from 4 889.78kg in the second quarter.

The first quarter remains the best performing quarter at 5 721.71kg.

Small-scale miners continue to struggle with deliveries dropping 7.85% to 385.48kg and 80% from 1.9t delivered during the same period last year. Payment delays continue to be a major problem for the miners even though Reserve Bank of Zimbabwe seems to think this is not the case. According to deputy governor Kupikile Mlambo, it is the absence of rebate, a common feature in most of the gold producing countries, that is the main impediment.  “There have been payment challenges, but that is not the major cause of the decline. Other countries pay a rebate and Zimbabwe does not,” said Mlambo at a Ministry of Finance press conference yesterday.

Primary producers firmed 16% increasing from 840kgs last year to 976kgs this year and 14.65% from last year.

Total deliveries, however, dropped to 1.3t this year from 2.8t last

In an interview, FPR general manager Fradreck Kunaka said while they were working to make sure that payments are made within five days, the industry has faced serious problems delivering gold to the market and repatriating United States dollars into the country after trading.

“The COVID-19 pandemic has had hampering effects on business operations across all sectors of the economy. Our industry has also not been spared. Flights coming in with United States dollars to pay miners were not flying in frequently because of the imposed restrictions.

“COVID-19 induced restrictions not only affected cash movement but also the movement of gold to the export markets thus worsening the challenges. However, recently these restrictions have been lifted and we are hoping this will improve the inflow of cash into the country,” he said.

Kunaka said the FPR has been forced to charter planes although the lockdowns remained restrictive as they had to seek clearance for landing in countries which they were getting the cash US dollars adding that deliveries will not increase meaningfully as long as Zimbabwe has to import mining inputs and the cash required to pay the small-scale miners for the gold deliveries.

Gold prices took a dip in September to reach oversold levels, and then started to rally again. The prices remain in a strong bull market dating back to early 2019. In addition, lawmakers are in talks for a second stimulus package, and this should provide a further boost to gold prices due to a weakening of the U.S. dollar.

Gold production in Zimbabwe is targeted at 100 tonnes by 2023 from a combination of small-scale and large scale producers.-Financial Express.

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