ZIMBABWE generated US$684,4 million from gold exports last year, with small-scale miners accounting for more than US$273 million, or 40 percent of total exports, as the country’s output of the metal continued to soar.
About 18,3 tonnes of gold was exported in 2015 – 4,4 tonnes more than a year earlier.
Fidelity Printers and Refiners is the country’s sole buyer and seller of gold and all of Zimbabwe’s exports of the metal are channelled through the Rand Refinery in South Africa.
The jump in gold production and exports comes at a time Zimbabwe has been rebuilding its reserves.
A gold reserve is the gold held by a national central bank, intended as a store of value and as a guarantee to redeem promises to pay depositors, note holders, trading peers or to secure a currency.
China’s central bank held US$3,23 trillion as at January 2016 in gold reserves and purchases the precious metal on a monthly basis.
Reports suggest that the People’s Bank of China added 580 000 ounces of gold to its official reserves in January and the bank now holds 57,18 million ounces, representing a 0,9 percent increase from December 2015.
Zimbabwe’s Finance Minister Patrick Chinamasa told Parliament in 2014 that the apex bank did not have “any gold reserves except for gold coins” which were valued at US$501 390 as at January 31, 2014.
“I have however asked the Reserve Bank to prepare for the day we can start to build our own gold and diamond reserves. The legal responsibility to keep such reserves would fall squarely on the RBZ,” said Minister Chinamasa then.
The RBZ disposed of 284 632 grammes of gold held by Standard Chartered Bank in London in early 2013.
Last week, a source familiar with the goings on at the RBZ said the bank had started building gold reserves and reaffirmed the need to push production up.
Said the RBZ source: “Without disclosing numbers, there is some progress in the area . . . the country has indeed started the process of building its own gold reserves. The building of gold reserves requires first that the country’s gold production levels be increased.
“When production is increased, there will be enough room to easily set aside gold reserves. In this regard, the Bank is working with some regional and international financial institutions in order to provide affordable funding to the sector.
“Important to note is that the country is leveraging on the current gold output in structuring gold backed offshore lines of credit, for the economy.”
Local output of the yellow metal is nearing peak production of 27 tonnes reached in 1999.
Government has set a target of 24 tonnes for 2016.
Fidelity Printers and Refiners, an arm of the RBZ, believes the target is achievable, but has stressed the need to fund gold producers.
It is estimated that a US$20 million facility can oil gold producers’ operations.
Fidelity acting CEO Mr Fradreck Kunaka told The Sunday Mail Business that any fund availed to the sector must be affordably priced.
The RBZ has said the 24-tonne target is achievable given that the 18,3 tonnes realised last year represented a 32 percent growth from the 2014 figure of 13,9 tonnes.
“What is required to achieve the target is for all stakeholders in the gold sector to work together in increasing production. In this regard, Government and the Bank will continue to strengthen their compliance monitoring in the gold sector as well as making interventions to boost gold production.
“As already highlighted, the bank will continue to engage its regional and international financiers in order to raise long-term affordable funding for the sector and the economy in general,” said the RBZ source.
The country has not invested in new gold coins.
The value of existing gold coin reserves may have come down from US$501,390 in January 2014 because of fluctuating international prices.
To help build gold reserves, the RBZ, Mines and Mining Development Ministry and Zimbabwe Republic Police are conducting thorough on-site inspections at all gold producers to ensure compliance with rules and regulations governing operations and to fully account for output and sales.
“This ensures that all gold produced by the miners is sold to FPR thereby reducing incidences of side marketing of gold by gold producers,” said the RBZ source.
A massive blitz at the country’s border posts has netted several local and foreign smugglers.
Minister Chinamasa proposed additional incentives in the 2016 National Budget Statement such as a reduced royalty rate of three percent on incremental output of gold “using the previous year’s production as a base year” beginning last month.
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