14 March 2019

Zimbabwe: 40 Tonnes Gold Target Attainable - Fidelity

State gold buying arm, Fidelity Printers and Refineries (FPR), is confident deliveries of the yellow metal will this year hit the 40 tonnes target set by Government as deliveries started picking up in the month of February after a lethargic start in January.

Government has this year set an ambitious gold delivery target of 40 tonnes and this comes after a record high of 33, 2 tonnes recorded last year. This year's target is in line with a Government set steady progression to 100 tonnes per year by 2023, in line with President Mnangagwa's Vision 2030 by which Zimbabwe should be an upper middle income earning economy.

The gold sub-sector is earmarked to play a crucial role in attaining the new status. In emailed response to Herald Business yesterday, FPR general manager Fradreck Kunaka, said the usually low activity months of the year had this time registered a 3, 9 tonnes retain.

Although the retain is lesser compared to 4, 6 tonnes last year, Mr Kunaka said there is confidence that 40 tonnes is still achievable as deliveries have started picking after new monetary regulations which have seen a departure from the "1:1" between RTGS balances and the US Dollar.

"Gold receipts at Fidelity Printers and Refiners (Pvt) Ltd for the months of January and February 2019 stand at 3, 9 tonnes," said Mr Kunaka.

"Gold inflows generally start slowly in the year and pick up as the year progresses. If the trend for 2018 is replicated in 2019, the (40 tonnes) target for 2019 is set to be achieved," he said.

Contrary to social media speculation that deliveries had plunged on the back of the 2019 Monetary Policy Statement (MPS) announced by Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya, Mr Kunaka said the statement had instead had a positive impact on gold operations.

The positivity, he said, largely stem from the fact that miners who get a chunk of their earnings in RTGS balances, were now having it multiplied by the 2, 5 interbank rate to the US Dollar compared to the "1:1" which obtained prior to the MPS. Primary producers, whose contribution to the overall country haul has been lagging behind their artisanal counterparts, are the ones whose returns have largely improved due to the new Government measures.

"The Monetary Policy Statement of 20 February 2019 has the following positives, miners retain 55 percent of their gold value as foreign currency and the 45 percent portion transferred into miners' bank accounts is multiplied by the ruling exchange rate on the interbank foreign exchange market.

"This rate has been around 2, 5 which means miners now receive 2, 5 times the RTGS value compared to the previous 1:1 rate. This move has even been welcomed by the Primary Producers who have in the previous weeks improved on their gold deliveries," he said.e previous 1:1 rate.

"This move has even been welcomed by the primary producers who have in the previous weeks improved on their gold deliveries," he said.

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