The Sunday Mail
GOLD miners require an additional US$20 million that is competitively priced with a payback period of at least five years if the country is to attain a target output of above 20 tonnes next year, a top Fidelity Printers and Refiners (FPR) official has said.
FPR, an arm of the Reserve Bank of Zimbabwe, is the sole buyer of gold in the country.
With total gold deliveries expected to hit 18 tonnes this year – three tonnes more than the 15 projected earlier – prospects indicate output can further increase with production from both small-scale and large-scale miners.
As at September 30, 2015, about 13 tonnes of gold had been bought by FPR, which was 0,9 tonnes shy of the 13,9 tonnes achieved last year.
Last week, FPR acting chief executive Mr Fradreck Kunaka told The Sunday Mail Business that they are targeting to buy a minimum of 20 tonnes of gold next year, but stressed that gold miners should be funded to the tune of US$20 million if the target is to be achieved.
“In our estimation, to achieve the 20 tonnes, miners require a minimum additional of US$20 million. The funds must have a tenure of five years or more and be competitively priced as opposed to the short term and highly priced loans available on the local market,” said Mr Kunaka.
Mr Kunaka said FPR has already approached a number of financial institutions to fund gold miners with bankable mining plans.
A small number of small-scale mines are benefiting from the FPR arrangements while the majority are failing due to lack of bankable business proposals and proof of delivery of the metal to FPR.
Meanwhile, during the 2016 pre-budget consultations, FPR expressed concern over the continued smuggling of gold out of the country and called for punitive measures against culprits. Mr Kunaka said given that smuggling, by its very nature, is difficult to ascertain, it was a challenge for the country to determine the revenue it was losing.
“Based on 2004 delivery levels, it can be estimated that illicitly traded gold ranges between 100 and 300 kgs per month with an estimated value of US$3,8 million and US$11 million respectively,” he said.
“It should be noted that there is a group of unregistered artisanal miners which is excluded from the formal gold trading arrangements as they do not have the requisite licences.
“The group was only allowed to trade unhindered in 2004 when the ‘no questions asked’ arrangement was implemented.
“Now, given the strict requirements under the Responsible Gold Scheme, the group can only be brought into the mainstream by being issued with Artisanal Mining Permits as a way of formalising the sub-sector. Smuggling remains a major challenge in the gold mining industry,” said Mr Kunaka.
To reduce the magnitude of gold smuggling, FPR has put in place measures that include the decentralisation of buying points to major gold producing areas in the country. It has also appointed gold buying agents to assist in the mobilisation of gold.
Mr Kunaka said the measures have yielded positive results given that out of the expected 18 tonnes now expected this year, “at least seven tonnes will come from the small-scale mines”.
He said the latest gold projections are an improvement compared to 3,9 tonnes delivered by the sector in 2014.
