Zimbabwe: Gold Buying As an Agent of Fidelity Printers and Refineries

In discussing business opportunities more often than not people discuss business lines that generate foreign currency. Mining features prominently especially gold mining as well as gold buying and selling. This article focusses on buying gold and selling it to Fidelity Printers and Refiners ("FPR").

FPR is a wholly owned subsidiary of the Reserve Bank of Zimbabwe. Its main business includes security printing and gold buying and refining.

In Zimbabwe all gold won from mining activities should be sold to FPR. FPR is the sole authorised gold buyer in the country.

All large scale miners, small scale miners and holders of gold buying permits should sell their gold to FPR. FPR then handles export of the yellow metal.

Many people are interested to know how they can lawfully buy gold and sell it to FPR, at a profit. One needs a gold buying permit from FPR. The proposed criteria for issuance of gold buying permits issued by FPR in January 2020 give guidelines explained below.

There are basically two categories of licensed gold buyers, namely:

Non custom millers or elution plant owners and

Custom millers and elution plant owners.

Non custom millers or elution plant owners

This category is made up of people or entities that are not involved in the operation of custom mills or elution plants. Custom mills are used to mill or crush ore for further processing to win gold otherwise known as bullion. The elution plant is part of the gold recovery process.

In order to be considered as prospective gold buying agents applicants in this category should meet the following criteria:

Police clearance for individual buyers or company directors or agents,

Propose under the current licence or make commitment of gold quantities one can buy per month,

Companies to provide a company profile and directors names and their physical addresses,

Passport size photos for the principal licence holder and company directors,

Current tax clearance certificate for companies.

Custom millers and elution plant owners

This category is made up of operators of custom mills and elution plants. For consideration prospective buyers in this category should submit:

Current licence for the custom milling plant and/ or elution plant issued by the Ministry of Mines and Mining Development and

Current tax clearance certificate

According to the said guidelines all custom millers are FPR's gold buying agents in terms of section 3 of the Statutory Instrument 178 of 2005.

In addition to the above criteria, a prospective gold buyer under either category should submit a survey showing prospective sellers of gold to the prospective gold buyer and the following must be met:

Quantities that a seller is willing to sell to the prospective buyer per week or per month,

Identity documents and phone numbers of such prospective sellers of gold to the prospective buyer,

The prospective sellers must countersign.

How one makes a profit

For gold delivered by the licensed gold buying agent FPR pays prices which are set from time to time relative to the international gold price.

In order to make a profit the cost of gold bought by the agent and attendant operating costs should be lower than the price paid by FPR. FPR's payment structure is reviewed from time to time as to the split between foreign and local currency.

Gold buying centres

For convenience FPR has gold buying centres around the country as more fully appears on the company's website.

This simplified article is for general information purposes only.

For further information please contact Fidelity Printers and Refiners or your investment advisor.

Godknows Hofisi is a legal practitioner, chartered accountant, corporate rescue practitioner, and consultant in deal structuring and tax. He writes in his personal capacity. He can be contacted on +263 772 246 900 or [email protected]

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