Zimbabwe: Govt to Establish Gold Centres to Curb Leakages

24 July 2020

The Ministry of Mines and Mineral Development will establish gold centres across the country to curb illegal leakages of bullion and promote official sale to the state buyer Fidelity Refineries and Printers, Minister Winston Chitando has said.

Addressing mining stakeholders at a parliamentary meeting to review legislation and policies governing the sector, Chitando said government was targeting to establish at least 16 gold centres across the country, to promote selling of gold through official channels, having launched a successful pilot centre in Bubi, Matebeland province.

Chitando said government was positioning itself to aggressively leverage increasing capacity within both artisanal and small scale mining as government pursues a target of 100 tonnes of gold per annum, despite a current drop in deliveries.

He said the gold centres, to be rolled out by government with funding from Fidelity under a part equity part loan scheme, will have downstream benefit as they are envisioned to increase domestic investment appetite in mining

"In gold we have realised a drop in delivery but there are two important things one is delivery and the other is capacity that capacity is increasing towards realization of the 100 tonne annual. The achievement of the 100 per annum will include both small scale and large scale.

"Capacity is increasing in the artisanal mining, medium and large scale mining sector.

"Government will be aggressively implementing gold centres across the countries. They will operate on a milling and CIP concept to increase production. We will also have the RBZ represented at the centres and miners will receive their cash on site of these centres," he said.

In 2020, export earnings from the mining sector are constituting 60% of total foreign currency earnings and this represents an increase from the 55% that the sector contributed in 2019.

The 2020 first quarter output contribution by Artisanal Small Scale Miners fell by 15.22% and Large Scale Miners fell by 6.96% compared to their 2019 first quarter output.

Government projects gold deliveries at 27 958 kg for the year 2020, which is lower than the 2019 levels despite the favorable international prices obtained compared to the previous year.

However there were misgivings by some of the members of the Parliamentary Portfolio Committee who said government has also granted gold buying license, ending the monopoly of Fidelity Printers and Refineries as the sole buyer.

Silent Chikwinya, Mbizo Member of Parliament said some of these licensed gold buyers were already offering higher premiums than Fidelity when it should be the last point of gold deliveries in the country.

Other legislatures, including the speaker of Parliament cautioned government against the recurrence of Zimbabwe Consolidated Diamond Company which was registered as a private entity, hundred percent owned by government.

Chitando confirmed that the vehicles created for the gold centre were indeed owned by the Ministry of Mines, despite the existence of the Zimbabwe Mining Development Corporation (ZMDC).

He however said the structural set up of the special vehicles, funded by Fidelity under a part equity and part loan scheme, will allow for the monitoring of performance of the project.

"We want to create appetite for the local investment to investment in, mining as there has been not appetite for local investors, we are allowing local investment to boost the artisanal and small scale mining.

"Gold centres that will be rolled out will be funded by Fidelity, part equity part loan scheme, but we have created Joint Venture so that we can also sit on the board and oversee the performance," said Chitando.

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