Gold deliveries to recover: Mangudya

Gold deliveries to recover: Mangudya
Published: 17 September 2019 (210 Views)
RESERVE Bank of Zimbabwe (RBZ) governor John Mangudya says he is confident gold deliveries will increase in the coming few months after government addressed bottlenecks in the sector.

This was after gold deliveries declined by 40,6 percent to 12,3 tonnes in the half year to June 2019 compared to 17,3 tonnes delivered during the comparative period in 2018.

"Exchange rate, pricing and payment issues, which partly accounted for the decline in deliveries have, however, been largely resolved through the recent monetary policy measures," he said in his mid-term monetary policy.

"It is, however, pleasing to note that small scale producers, despite facing a plethora of challenges, continued to dominate the country's gold deliveries, accounting for more than 60 percent of total deliveries."

This comes as the southern African country is targeting gold deliveries of 40 tonnes this year after last year's deliveries closed at 33,28 tonnes, a figure that failed to meet the revised 2018 target of 34 tonnes.

Last year, gold contributed over 65 percent of the country's mineral export earnings, making it the highest forex earner ahead of tobacco.

During that same period gold earned $1,7 billion against tobacco's $882 million.

Documents seen by businessdaily show that the total amount of gold delivered to Fidelity Printers, which is the sole buyer of the mineral, nose-dived from 2 323 tonnes in May 2019 to just 1 658 tonnes in June.

The massive decline in June coincided with the introduction of Statutory Instrument 142 of 2019 in the same month which barred the use of multi-currencies and made the Zimbabwean dollar the sole legal tender.

The drastic decline was most prevalent among small-scale producers. Deliveries from small-scale producers, who are the major gold producers, plunged from 1 278 tonnes in May to just 0, 687 tonnes in June.

Small-scale miners delivered less gold than large-scale producers in June, the first time this has happened since the beginning of the year. Gold delivered in January was 1 926 tonnes worth US$79 million, while 2 274 tonnes gold worth US$96 million was delivered in February.

In March, 2 764 tonnes of gold worth US$115 million was delivered while in April 2 279 tonnes of gold worth US$94 million made its way to Fidelity Printers.

The decline in gold deliveries comes at a time there has been a drop in the production of the country's major minerals.

The mining sector registered a 15 percent decline in mineral production in the first quarter of 2019 due to a depressed operating environment. The decline was mainly attributed to prolonged power outages at the mines with some going for between four to seven days without electricity.

According to a Chamber of Mines production report unveiled at the organisation's annual general meeting held in May, there was an overall production decline across all key minerals except for a marginal two percent increase in chrome ore.

- dailynews

Tags: gold,
 

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