Gold deliveries in the month of July this year totaled 1.40 tonnes, a 49 percent decline from 2.77 tonnes in the comparable period last year, Fidelity Printers and Refiners (FPR), the country’s main buyer of the precious metal has said. Of the tonnage, small scale miners contributed the bulk – 0.747 tonnes. On the other hand, big miners contributed 0.658 tonnes in the period under review.
“The decline could attributed to the fact that miners are still coming to terms with the adjustment in our payment method,” FPR stated. “As from the 17th of July, 2020 the payment method was reviewed from paying flat amount of US$45 per gram to 100% United States dollar payment bench marked against the prevailing London Bullion Market Association (LBMA) price to encourage gold miners to sell using formal channels and shun black market as well as smuggling.”
As at August 14, 2020 prices averaged above US$53 per gramme, a situation which FPR believes will attract more miners to come through. FPR added that: “It is a move meant to encourage the gold miners to sell using the formal channels and to shun the black market. We envisage the deliveries will start to improve going forward.”
Cumulative deliveries to date have gone down 20 percent to 12.003 tonnes from 15.070 tonnes due to unfavorable mining policies and effects of the coronavirus which thwarted many miners to buy consumables due to lockdowns in other countries. In 2019, the country’s annual gold deliveries declined 16 percent to 27.6 tonnes from 33.2 tonnes in 2018. The figure was way below the 40 tonnes target, although the output was the second highest since independence in 1980.
Correspondingly, gold export earnings last year went down 28 percent to US$946 million from US$1.33 billion in 2018. The drop in production could be linked to smuggling of the yellow metal due to unfavorable local payment modalities. Zimbabwe is targeting to be producing 100 tonnes of gold per year by 2023, part of a drive to achieve export earnings of US$12 billion by the mining sector by that time.