Zimbabwe’s gold deliveries in June totaled 1.409 tonnes, a 6 percent decline from 1.501 tonnes in the comparable period last year, Fidelity Printers and Refiners (FPR), the country’s main buyer of the precious metal has said.
This comes as FPR introduced a new gold framework, which saw the authority paying a fixed US$ price to small scale miners. Under the new arrangement, large scale gold producers are be paid 70 percent of their gold sale proceeds to FPR into their nostro accounts while the remainder will be paid out in local currency.
Small scale gold buying agents and artisanal producers are being paid in cash at a flat price of US$ 45 per gram of fine gold. However, they bemoaned saying it does not provide a win-win situation between the buyer and gold miner.
Of the tonnage, small scale miners contributed the least – 0.539t. On the other hand, big miners contributed 0.869t during the period. “Deliveries in the month of June were recorded at 1.4t, the reason behind this decline could be attributed to the fact that deliveries for the month coincided with the release of the new gold trading framework published on the 26th of May,” FPR stated.
“Many stakeholders are still trying to understand the implications of the new payment method, hopefully with time thy will adjust and start bringing in their gold using the formal channels.” Also, gold deliveries went down 13 percent to 10.597t in the first six months of 2020 from 12.294t achieved in the same period last year. Again, this comes as the sector takes a hit from acute foreign currency shortages and Covid-19 restrictions which affected small scale producers.
In 2019, the country’s annual gold deliveries declined 16 percent to 27.6 tonnes from 33.2 tonnes in 201.The figure was way below the 40 tonne 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.