Zim pursues London Bullion Market readmission

HARARE - Zimbabwe has intensified efforts to mobilise gold in excess of 15 tonnes this year as the country forges ahead with its plans to be readmitted to the London Bullion Market Association (LBMA).

The country’s gold output has been steadily increasing since 2010 and rose to 14 742 kg in 2012 from 12 992 kg a year earlier.

Charity Dhliwayo, the acting Reserve Bank of Zimbabwe (RBZ) governor says government’s decision to re-designate Fidelity Printers and Refiners Limited (Fidelity) as the sole buyer and exporter of gold in the country, will facilitate the mobilisation of the yellow metal.

“As such, Fidelity Printers and Refiners will, apply for accreditation to the London Bullion Marketers Association once they refine gold in excess of 10 tonnes per annum. Notably, the framework would pave way for the country to directly export refined gold to the international market, build gold reserve buffers as well as resuscitate the domestic jewellery industry,” she said.

Industry experts claim that re-admission to the London market, the biggest centre for gold trading according to the LBMA, would increase Zimbabwe’s ability to sell to global buyers.

The southern African country dropped out of the organisation in 2008 after production slumped as a result of electricity and chemical shortages and delayed payments from the central bank, which bought all the metal produced locally.

Since its suspension from the LBMA, Zimbabwe has been exporting its gold through South Africa for refining.

However, in the 2014 National Budget government announced that from this year onwards, Fidelity would be the sole buyer of gold for value addition.

Dhliwayo noted that the company was also working on modalities of entering into hedging arrangements which will ensure that they buy gold at favourable prices even during times when the price of gold is declining.

“In order to ensure access by the small-scale sector (including artisanal miners) to the market as well as reducing vulnerability of miners to robbers, Fidelity has buying centres in Harare, Bulawayo, Kadoma, Kwekwe, Gweru, Gwanda, Filabusi, Zvishavane, Masvingo and Mutare,” she said. The country’s top gold mines include Metallon, owned by South African businessman Mzi Khumalo, Duration Gold Zimbabwe, Blanket Mine and New Dawn Corporation.

The central bank said small-scale producers would immensely benefit from being paid the ruling international gold price which is transparent.

“In order to ensure that the country benefits from enhanced gold production through the empowerment of the small-scale sector, there is need to provide facilities to fund their mining activities.

Banks are encouraged to increase lending to this sector,” said Dhliwayo. 

Furthermore, noted Dhliwayo, Fidelity will also play a pivotal role in the facilitation of those investors keen to equip small-scale miners by being available to buy all the gold and administration of cession of proceeds when gold is disposed.

 

Comments (1)

I demand an immediate review of the racist, exclusionary and at least achaic minerals act 1892.(Act1 of occupation) so that legislation benefits the simplest sons and daughters of the soil. I encourage the policycrafters to recognise and regulate the so-called "gwejas" and open an inexhaustible stream of tax revenue for the state. the colonisers enacted and enforced policies that benefited because it was meant to benefit that which they recognised as a person, i.e homo sapien sapien of immediate caucassian descent. what do we do? our resources are creating quality employment and tax revenue elsewhere. we shall regard this as our greatest flop.

maombo david - 6 February 2014

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