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Martin Kadzere Senior Business Reporter
FIDELITY Printers and Refinery, a State-owned gold refiner, resumed operations on Tuesday this week after a major facelift of its Harare plant, senior officials said yesterday.
The company, a subsidiary of the Reserve Bank of Zimbabwe, ceased operations in 2007 after gold output hit a record low of three tonnes in eight years, making running the refinery unviable.

Since then, Zimbabwe has been sending its bullion for refinery and marketing to Rand Refinery of South Africa. The resumption of gold refining will pave way for Zimbabwe’s re-admission to the London Bullion Marketing Association, officials said.

“The plant is now up and running and they are refining between 10 and 13 kilogrammes per day,” said one source. “But even though we have resumed operations, we will continue marketing our gold through the Rand Refinery until we are readmitted on LBMA . . . maybe for the next three years before we can make an application.”

For a country to be re-admitted to the LBMA, it has to produce a minimum 10 tonnes per year.
The LBMA cancelled Zimbabwe’s membership in 2008 after it produced three tonnes of gold. Most gold mining companies had suspended operations after the Reserve Bank raided their foreign accounts, leaving the miners with very little or no working capital.

In the nine months to September this year, gold output rose 29 percent to 10,4 tonnes from the previous comparable period, earning the country US$483 million, the Chamber of Mines of Zimbabwe said.

Last year, gold production was 14 743kg, earning the country US$1,9 billion. Zimbabwe is targeting 17 tonnes of the yellow metal this year, but may fall of the target due to the fall in international prices. At its peak, Zimbabwe produced 27 tonnes in 1999.

The gold price peaked in August 2011 at US$1 883 per ounce, the culmination of a decade-long bull run. Ever since the dot.com bubble burst, investors have poured cash into the so-called safe haven, pushing the price skywards. This gold bull market coincided with the “lost decade” in equity markets, when prices slid sideways.

But since the 2011 peak, the value of gold has fallen more than 30 percent to just US$1 255.
Fidelity Printers has the capacity to refine gold and silver to purities of 99,5 percent and above using the miller chlorination and electrolytic refining processes.

The company is licensed to buy gold from large-scale producers, small-scale producers and holders of gold buying permits. Over the years, it decentralised its buying activities from Harare to cover the entire country, thereby significantly reducing the security risks associated with transporting gold for the small-scale sector.

Gold delivered to the centres is paid for on the spot after carrying out a specific gravity determination of the gold content. At the election of the customer, payment can be effected after performing the fire assay analysis.